Unit I

Joint Stock Company

Introduction

With the technological improvements, the scale of operations has

increased. The requirement for finaces and managerial resources have

gone up. The traditional forms of organization such a sole-proprietorship

and partnership could not meet the requirements of business. The increase

business volumes also brings in more liabilities. Under these

circumstances, the company form organization has developed as the most

suitable alternative. In this form of organization, a large number of

persons known as shareholders join hands to start a bigger business and

the liability members is also limited to the extent of shares they have

subscribed to.

A comprehensive Companies Act was passed in 1956 and

undertakings registered under this Act are known as ‘companies’. The

companies started under state or central legislations are called

‘corporations’.

Definitions

# A company is an association of many persons who contribute

money or money’s worth to a common stock and employ it in some

trade or business, and who share the profit and loss (as the case

may be) arising there from.

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# A joint stock company is a voluntary association of indivisible for

profit, having a capital divided into transferable shares, the

ownership of which is the condition of membership.

# A company means a company formed and registered under this Act.

Features

The following are the characteristics of a Joint Stock Company:

1. Association of Persons: A company is an association of persons

joining hands with a common motive. A private limited company

must have at least two persons and a public limited company must

have at least seven members to get it registered.

2. Indepent Legal Entity: The company is created under law. It has

a separate legal entity apart from its members. A company acts

independently of its members. The company is not bound by the

act of its members and members do not act as agents of the

company. The company can sue and be sued in its own name.

3. Limited Liability: The liability of its share-holders is limited to

the value of shares they have purchased. In case the company

incurs huge liabilities, the shareholders can only be called upto pay

the unpaid balance of their shares. The liability of members to

company limited by guarantee is limited to the guaranteed amount.

4. Common Seal: A company being an artificial person cannot put its

signatures. The requires every company to have a seal and get its

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 name engraved on it.

5. Transferability of Shares: The shares of a company can be

transferred by its members whenever the members want to dispose

off the shares, they can do by following the proceed devised for

this purpose. Under Articles of Association, the company can put

certain restricted on the transfer of shares but it cannot altogether

stop it.

6. Separation of Ownership and Management: The share-holders

of a company are wide scattered. A share holder may like to invest

money but may not be interested in its management. The

companies are managed by Board of Directors. The ownership and

management are in separate hands.

7. Perpetual Existence: The company has a permanent existence.

The share holders come or may go but the company will go on

forever. The continuity of the company is affected by death, lunacy

or insolvency of its share holders. The company can be wound up

by the operation of law.

8. Corporate Finance: A joint stock company, generally, raises large

amounts of funds. Capital is divided into shares of small

denomination. Since there is no limit on number of maximum

members in public companies, large amounts of sources can be

raised from persons in different walks of life.

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9. Centralised and Delegated Management: A Joint Stock

Company is an autonomous self-governed body. The share holders

being large in number cannot look after the day-to-day. Activities

of the company. They elect Board of Directors in general body

meeting for managing company.

10. Publication of Accounts: A joint stock company is required to file

annual statement with the Registrar of Companies at the end of a

financial year. The annual statements are availability for inspection

in the office of the Registrar.

Types of Companies

On the basis of ownership the companies can be classified into

following categories.

1. Private Company

According to companies Act, a private company is one which has

the following characteristics:

(i) It has a minimum of two members and a maximum of fifty

members.

(ii) A private company restricts the rights of members to transfer their

shares.

(iii) It prohibits any invitation to the public to subscribe to its shares

and debentures.

(iv) Does not invite general public to invest deposits in the company.

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 A private company is an ideal form of organization when a

business is to be expanded at a large scale without involving large

number of shareholding groups.

2. Public Company

According to Section 31(i) (iv) of the Indian Companies Act, all

companies other than private companies are called public companies it is

a company in which public at large is interested. A public company has

the following traits:

(i) It is formed with a minimum of seven members.

(ii) It invites general public to subscribe to its shares.

(iii) There is no restriction on the maximum number of members.

(iv) It permits the transfer of shares.

(v) Has minimum paid up capital of Rs. Five lakhs.

● Privileges or Benefits of a Private Company.

A private company is given certain exemptions or privileges as

compared to a public company.

● Some of the main privileges are as follows:

1. A private company can be started with just two members whereas a

public company required at least seven members.

2. A private company is not required to file a prospectus or a

settlement in lieu of prospectus with the Registrar of companies.

3. It can work with just two directors.

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4. A private company is not required to hold a statutory meeting and

filing a statutory report.

5. There is no restriction of minimum subscription as in the case of

public company. It can directly allot the stories.

Co-operative Organisation:

Co-operative societies are voluntary associations started with the

aim of service to members. Hubert calvent says,” co-operation is the form

of organism where in persons voluntary associated together as human

beings on the basis of equality for promotion of economic interest of

themselves”. V.L. Mehta defines co-operation as, “one aspect of a vast

movement which promotes the voluntary association of individuals

having common economic needs which combine towards the

achievement of economic ends. Dr. HN. Defines co-operators as

operative is self help as well as mutual help. It is a joint enterprise of

those who are not financial strong and cannot stand. On their legs and

together com together not with view to get pro but to overcome disability

arising out of want of adequate financial resources.

The India co-operative societies Act, 1912 defines co-operative in

section 4 as “society which has its objective the promotion of economic

interests of its members in accordance with co-operative principle”. In

fact, co-operative movement was started to safegue consumers from

explosion of capitalism. It is self help as well as mutual help.

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Features of co-operative organization:

1. Voluntary Membership:- Everyone is at liberty to enter or leave

the co-operative society as and when he likes. Nobody is compelled to

join a co-operative society. The members are also free to use or not to use

the service of the society. Though there is no limit on the membership of

the societies sometimes certain limits are imposed to keep the society as a

workable group. Everybody willing to join a society is allowed to do so.

Voluntary membership has been responsible for success of co-operative

movement.

2. Political and Religious Neutrality:- The membership of a co-

operative society is opened to all irrespective of religion, caste, creed,

colour or political affiliation. The co-operative movement can attract a

large membership only by staying out of polities where people have

divided opinions. Co-operators represent universal brotherhood and it

should not lose its path in political contradictions.

3. Democratic Management:- The management of co-operation

society is always an democratic lines. All the members of a society elect a

body of persons to conduct and control day-to-day working of the society.

The members frequently meet and give guidelines to its executive. In a

co-operative, democracy is more than a system, it is condition of its

business success. Co-operative business stands or falls with democracy.

4. One Man, One Vote:- In co-operative societies, every member is

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given one vote irrespective of his contribution towards the number of

sharer held by a person, so persons having large number of shares control

the organization. In co-operative; nobody can control the society on

strength of his wealth. All members have equal voice in the management

of the society.

5. Service Motive:- The primary objective of co-operative societies

is to provide service to their members. The aim is not to earn profits as is

the case in all other forms of organization. The service of members in

fundamental object of co-operative services. The profit is generally

earned when goods are sold to non-members.

6. Distribution of Surplus:- The societies earn surplus from their

services. This surplus is not divided according to capital contributed. It is

distribution according to purchases made by one or more members in

case of consumers co-operative, and according to goods delivered to

society for sale in case of producers, co-operative. At present this rate

should not exceed 9%. One-forth of the surplus should be kept as reserve

in the society and upto 10% of surplus should be spent for general

welfare of the members.

7. Cash Trading:- Another principle of co-operative societies is

trading on ‘cash basis’. Cooperative flourish only when cash trading

strictly followed. Cash-traders ensures economy for co-operative. It

eliminated bad depets and collection expenses. The societies may makes

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some exception to this rule for helping needy members but generally cash

trading principle is followed.

8. Limited Interest on Investment:- The pioneers of co-operative

movement wanted to give certain percentage on capital contribution in

form of divided. This is an incentive to members for keeping money with

the society as deposits. This is a first charge on the surpluses of the

society.

9. Sale control:- The co-operative societies are to follow certain rules

and regulations frame by the government. In India, all co-operative

societies are registered under Indian co-operative societies act or

respective state co-operative laws.

10. Co-operative Education and Training:- The success of a co-

operative will depend up to the awareness of its members toward the

principles of societies, so that they may work united for success of

society.

Types of Co-operative societies:-

Important types of co-operative societies are discussed as follows:-

1. Consumers co-operative:- The consumers co-operative societies

are started to lower and middle class people. These societies protect

weaker sections from ditches profit hungry businessman. The members

contribute capital in shape of share money. Membership of these societies

is open to everyone irrespective of caste, creed or colour. The

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commission and profit of middleman eliminated in the process.

Government sells essential commodities to consumers at regulated prices

through co-operative societies.

2. Producers co-operative:- These societies are established for

benefit of small producers to find it difficult to collect various factors of

production and for face marketing problems.

These societies are of two types:

(a) Production co-operatives:- The production of goods is undertaken

by members in their houses or at common place. The members are treated

as employees of society and are paid wages for their services. The society

sells these goods in the market.

(b) Industrial service co-operative:- These co-operatives are started

to help members in getting various industrial inputs at reasonable prices.

The co-operatives makes bulk-purchases of raw material from supplies

and supply them to members. Individual members earn profits on their

sales and also share the profits of society on the basis of certain criterion

earlier agreed upon.

3. Marketing co-operatives:- The meeting co-operative are

associations of producers for selling their products at remunerative prices.

The production of different members is pooled and the society undertakes

to sell these products by eliminating middleman. The market man

societies also collect marketing information and supply it to producers for

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their benefits.

4. Housing co-operatives:- The low and middle income group

people able to construct their own houses for want for money. The

societies are non-popular because the instinct to own a house is not

satisfied. These societies are helpful in arranging cheap plots and loans

for the members. The constructed houses are handed over the members.

The members play the price in easy instalments spread over a longer

period. These societies are popular among poor families.

5. Credit co-operative:- The credit co-operative societies are formed

to give financial help small farmers and other poor section in the society.

The village money-lenders charge exorbita-interest and exploit innocent

poor people.

The credit co-operative societies may be distinguished as follow:

(a) Rural credit co-operative societies:- The rural credit co-

operatives can be formed with at least 10 members. The members

purchase shares of societies as to raise capital. These societies are also

entrusted with jobs of arrangement commodities like salt, sugar, tea,

matches, class etc. The object of these societies is to be farming and

better living.

Merits of Co-operative:-

1. Open Membership:- The membership of co-operative societies is

open to each and every person. Nobody is barred from joining societies

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on basis of economic position, caste, colour or creed.

2. Service Motto:- The co-operative societies are started not for

profits but for service. The societies try to promote the interests of the

members. A feeling of co-operation is created among members.

3. Supply of Goods at Cheaper Rates:- The societies purchase

goods directly from producers and sell them to the members at cheap

rates. The middle man are eliminated from the channel of distribution. So,

co-operators societies ensure regular supply of goods at cheap rates.

4. Democratic Management:- The management of a co-operative is

elected by member from among themselves. All members are given equal

voting rights irrespective of number of shares held by them.

5. New Management Costs:- The management of a co-operative

society is in the hands of persons elected by share holds. Some persons

are employed to look after day-to-day working of the societies.

6. Surplus Shared by Members:- The societies sell goods to the

members on ammonias profits to cover up administrative costs. Non-

members are charged at market rates. The surplus earned the society is

distributed among member on basis of their products.

(a) Urban credit co-operative societies:-The urban co-operative

credit societies or urban banks area run on scoulze deritz model. Idea of

the societies is to help small traders, workers, aristmes and other class

people. Members are provided with short time wans on lower rates of

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interest. The control is contributed by members and financial help is stout

from government.

7. Co-operative farming societies:- Co-operative farming societies

are voluntary associate of farmers formed to reap the benefits of large

scale farming on scientific lines. Better farmer increases productions and

improves the economic position of members. The farming co-operates

may of following types:-

(a) Co-operative Better Farming Societies:- The societies are

formed to improve method of farming and to arrange facilities connected

with use of machinery, harvesting of crops marketing of products.

(b) Co-operators joint farming societies:- The hand of members is

pooled in societies. The own ship rights to land are retained by the

individual members. Profit is divided according to wages earned by

members. The members have a right to with-draw their lands from a

society.

(c) Tenant farming societies:- These societies are formed to help

tenants. The service acquires land to lease hold basis and also on free

hold basis. The land is distributed to members for independent cultivation.

Financial help too is arrangement for the members. These societies are

formed to help small tenants.

Limitations of Co-operatives:-

1. Lack of capital:- The co-operatives are started by economically

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weaker sections of society. The shares are generally of lower

denomination so that more and more persons may associate with societies.

They cannot under take production for goods for wand of funds, so co-

operative societies suffer from capital.

2. Lack of unity among members:- The members are drawn from

different sections of the society. The members do not understand the

working of societies so they start suspecting each other. The members do

not take to much interest in the affairs.

3. Cash trading:- The cash trading business has both advantages and

disadvantages. The members of society are generally from poor sections

of society. Though the societies sell goods at lower prices but absence of

credit facilities compes them.

4. Political Interference:- The societies are generally under the

regulations of government. As comparative societies stand in India. Every

government tries their own party members. Political interference has

adversely affected co-operative movement in India.

Meaning of MNC’s (Multinational Companies)

A MNC’s are an organisation doming business in more than one

country. In other word it is an organisation on enterprise carrying on

business in not only the country where it is registered but also in several

other countries. It may also be termed as international corporation, global

giant and transnational corporation.

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Definition:

“Multinational corporations or companies are those enterprise

whose management, ownership and controls are spread in more than one

foreign country”.

- W H Moreland

Features of MNC’s

Giant Size: The assets and sale of MNC are quite large. These companies

operate on large scale as they trade in more than one companies. These

companies generate large wealth. Their operations are so huge that

sometimes their sale turn over exceeds the Gross National Product of a

developing countries.

International operation: A MNC operates in more than one country. It

has branches, factories, offices in several countries. It operates through a

network of branches and subsidiaries in host countries.

Professional management: MNC Employs professional experts,

specialized people MNC’s try to help their employees updated by

imparting them training from time to time.

Centralized contract: The branches of MNC spread in different

countries are controlled and managed from the headquarters situated in

home country headquarters in the home country is the main branch.

Oligopolistic powers: Oligopoly means power in the hands of few

companies only. Due to their giant size the MNC occupy dominating

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position in the market. They join hands with big business houses and give

rise to monopoly.

Sophisticated technology: Multinational companies make use of latest

and advanced technology to supply world class products. They use capital

intensive technology and innovative techniques of production.

Advantages of (Home Country)

I. MNC’s create opportunities for marketing the products produced in

the home country throughout the world.

II. They create employment opportunities to the people of home

country both at home and abroad.

III. It gives a boost to the industrial activities of home country.

IV. MNC’s helps to maintain favourable balance of payment of the

home country in the long run.

V. Home country can also get the benefit of foreign culture brought by

MNC’s.

Disadvantages (Home Country)

I. MNC’s may transfer technology which has become outdated in the

home country.

II. AS MNC’s do not operate within the national autonomy, they may

pose a threat to the economic and political sovereignty of host countries.

III. MNC’s may kill domestic industry by monopolizing the host

country’s market.

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IV. In order to make profit, MNC’s may use natural resources of home

country indiscriminately and cause depletion of resources.

Disadvantages of MNC’s for host country

I. MNC’s transfer the capital from the home country to various host

countries causing on unfavourable balance of payment.

II. MNC’s may not create employment opportunities to the people of

home country if it adopt geocentric approach.

III. As investment in foreign countries is more profitable, MNC’s may

neglect the home countries industrial and economic development.

Advantage of MNC’s (Host Country)

I. The investment level, employment level and income level of host

country increases due to operation of MNC’s.

II. The industries of host country get latest technology from foreign

countries through MNC’s.

III. The host country’s business also gets management expertise from

MNC’s.

IV. The domestic traders and market intermediaries of the host country

gets increased business from the operation of MNC’s.

V. MNC’s break protectionalism, curb local monopolies, create

competition among domestic companies and thus enhance their

competitiveness.

VI. Domestic industries can make use of R & D outcomes of MNC’s.

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VII. The host country can reduce imports and increase exports due to

goods produced by MNC’s in the host country.

VIII. Level of industrial & economic development increase due to

growth of MNC’s in the host country.

Insurance

Some future risks will have to be faced as they are a part of

business. There are some other risks which can be transferred to

specialised institutions known as insurance companies. Insurance is a

contract between two parties whereby one party agrees to indemnify the

loss suffered by the other party for a consideration of some money called

‘premium’. The party which promises to indemnify the loss is called

‘insurer’ (insurance company) and the persons or the property subject to

risks is called ‘insured’. The agreement providing for insurance is called

an ‘insurance policy’.

Insurance system is based on an important technique called

‘pooling system’. Large number of persons combine together to reduce or

to compensate the future loss of any one of them. They contribute small

amounts of money and part it to the affected party. Pooling system helps

in spreading the risk over a large number of units. This system is based

on the theory of large numbers or more technically, the science of

probability. Insurance companies act as a channel for collecting premium

and indemnify the loss.

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Definitions of Insurance

E.W. Patterson, “insurance is a contract by which one party, for a

consideration, called premium, assumes a particular risk of the other party

and promises to pay to him or his nominee a certain or ascertainable sum

of amount on a specified contingency”.

Disnadle, “insurance is an instrument of distributing the loss of few

among many”.

Allen C. Mayerson, “insurance is a device for the transfer, to an

insured, of certain risks of economic loss that would otherwise be borne

by the insured”.

Justice Tindall, “insurance is a contract in which a sum of money is

paid to the assured in consideration of insurer’s incurring the risk of

paying a large sume upon a given contingency.

Important terms used in insurance need

(i) Insurance policy:A contact of insurance explaining its terms and

condition is called ‘insurance policy’. It contains information about the

subject insured, the amount of policy, the party to the contract the

contingencies covered etc. It is properly stamped and is normally issued

by the insurance company.

(ii) Insurer: It is insurance company which undertakes the risk. It is

the party which pays money or compensation on the happening of certain

event or contingency to the insured party or its nominees. The LIC,

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general insurance companies or other private companies in insurance

business are the insurers.

(iii) Insured: Insure is the person who has taken up the insurance

policy. Insurer shifts his risk to the insurance company on the payment of

a premium. He is the person who see protection.

(iv) Premium: It is the amount paid by insured to the insurer as a

consideration for shifting the risk. The person taking up insurance cover

will pay a specified amount as per agreement to the insurance company.

It is the price of insurance cover.

(v) Compensation: It is amount paid by the insurance company to the

policy holder or his nominee, in case of death of insured. The loss of life

cannot be compensated but a specific amount is paid in this regard.

(vi) Insured amount: It is the maximum amount which an insured may

get in case of loss insured amount is mentioned in the policy and the

premium is fixed as per the amount. In case of general insurance, insured

amount is the maximum amount upto which the clap may be settled.

(vii) Contingency: It is the actual happening of an event or not

happening of an event or which the loss depends.

Principles of Insurance

1. Insurable Interest

The person getting an insurance policy must have an insurable

interest in the property or life insured. A person is said to have an

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insurable interest in the property if he is benefited by its existence and

prejudiced by its destruction. Without insurable interest the insurance

contract is void. The ownership of a property is not necessary for

establishing insurable interest. A banker has an insurable interest in the

property mortgaged to it against a loan. An employer can insure the lives

of his employees because of his pecuniary interest in them. In the same

way, creditor can insure the life his debtor. A person cannot insure the

property of a third party, because he does not have an insurable interest in

it.

In case of fire insurance, insurable interest must exist both at the

time of contract and at the time of loss. In marine insurance, however,

insurable interest must exist at the time of loss. It may or may not exist at

the time of contract.

In case of life insurance, the person taking up a policy should have

insurable interest in the life of insured person at the time of taking up the

policy. It is not necessary that he should have insurable interest at the

time of maturity also. Suppose a person gets an insurance policy on the

life of his wife. Later on the wife is divorced the policy will not become

void because the husband ceases to have an insurable interest.

2. Utmost Good Faith

The insurance contract is founded on the basis of utmost good faith

on the part of both the parties. It is obligatory on the part of the proposer

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(one who wants to get an insurance policy) to disclose all material facts

about the subject to be insured. If some material facts come to light later

on, then the contract can be aided at the discretion of the insurer.

The amount of premium is fixed on the basis of all the facts

supplied to the insurance company. If some facts are with held, then the

amount of premium will not be properly settled. The insurer should also

disclose the facts of the policy to the proposer. So utmost good faith on

the part of both the parties is a must.

3. Indemnity

The principle of identity is applicable to all types of insurance

policies except life insurance. Indemnity means a promise to compensate

in case of a loss. The insurer promises to help the insured in restoring the

position before loss. Whenever there is a loss of property, the loss is

compensated. The compensation payable and the loss suffered should be

measurable in terms of money.

The insured will be compensated only upto the amount of less

suffered by him. He will not earn profit from the contract. The maximum

amount of compensation will be upto the value of the policy. The value of

the policy undertaken is fixed at the time of contract. The actual amount

of loss suffered is compensates and the value of policy is only the

maximum limit.

The principle of indemnity is not applicable in case of life

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insurance contracts because it is not based on the principle of

compensation. The loss of life cannot be compensated by any amount of

money.

4. Principle of Contribution

Sometimes a property is insured with more than one company. The

insured cannot claim more than total loss from all the companies put

together. He cannot claim the same loss from different companies. In this

case he will be benefited by the insurance which runs counter to the

principle of indemnity. A person cannot be restored to a better position

than before the loss occurred. The total loss suffered by the insured will

be contributed by different companies in the ratio of the value of policies

issued by them. So companies make a contribution to restore the previous

position of the insured. For example, a has a property of one lake rupees.

He gets an insurance policy for Rs. 50,000 from Rs. 8 co and Rs. 50,000

from 8 co. Because of fire, property is destroyed to the extent of Rs.

40,000. A cannot claim Rs. 40,000 from R & Co and Rs. 40,000 from S

& Co. He can claim a total sum of Rs. 40,000 from either of the

companies or from both companies to the extent of Rs. 20,000 from each.

In case he claim Rs. 40,000 from R & Co then S & Co. So this is known

as the principle of contribution.

5. Principle of Subrogation

The principle of subrogation is applicable to all insurances other

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than the life insurance. It the insured party gets a compensation for the

loss suffered by him, he cannot claim the same amour of less from any

other party. The rights of claiming the loss are shifted to the insurer, for

example. A gets his house insured for Rs. 50,000 with an insurance

company. A cannot sue B for getting the compensation because he has

already been compensated by the insurance company. Now, insurance

company can sue B on behalf of A because of making good the lost

suffered by A, the insurance company steps into the shoes of A.

If the insured claims compensation from both the sides, he will be

put in a better position than earlier. It is against the principle of indemnity.

The insurance company can also claim only upto the amount it has said to

the insured and not more.

Types of Insurance

The insurance covers a variety of subjects but commonly used

insurance policies A to the following subjects:

1. Marine Insurance

2. Fire Insurance

3. Life Insurance

MARINE INSURANCE

Nature

Marine insurance is concerned with overseas trade. International

trade involves transport of goods from one country to another country by

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ships. There are many dangers durh transhipment. The persons who are

importing the goods will like to insure the safe arrival of goods. The

shipping company wants the safety of the ship, so marine insurance in

suns coverage of all types of risks which occur during the transit.

Marine insurance may be called a contract whereby the insurer

under takes to indemnity insured in a manner and to the extent thereby

agreed upon against marine losses.

Marine insurance has two branches:

(i) Ocean Marine Insurance

(ii) Inland Marine Insurance

Ocean marine insurance covers the perils of the sea whereas inland

marine insurance of trade. It was started during the middle ages in Italy

and then in England. The sending off by the sea involves many perils; so

it was necessary to get the goods insured. In modern marine insurance

business is well organised and is carried on scientific lines.

Subject Matters to be Insured

The marine insurance may cover three types of things:

(i) Cargo Insurance:- The person who is importing the goods and the

person who is so them are interested in the safety of goods during the sea

journey. The goods to be insurance called ‘cargo’. Any loss of goods

during journey is indemnified by the insurance companion goods are

generally insured according to their value but some generally insured

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according to their value but some generally of profit can also be included

in the value. The cargo policies may be special reporting and fixating the

special policy is only for one shipment. Reporting or open cargo policy,

on the others hand cowers all shipments made by an exporter over a long

period of time. The floating policy is us similar to open cargo policy but

differs from it only in respect of the method of paying the premium in

Imaging Policies, the value of the future shipments is estimated and

premium is deposited what the prampany. Later on, actual shipments are

compared with the estimates and the premium saghtment.

(ii) Hull Insurance:- When the ship is insured against any type of

danger it is called hull insurance. The ship may be insured for a particular

trip or for a particular period.

(iii) Fright Insurance:- The shipping company has an interest in bright

the interned may be paid in advance or the arrival of goods. The shipping

company may insure the freight to be recreations with is known as freight

insurance.

Kind of marine policies:

There are a number of marine insurance policies to cover varied

risks.

The important policies are discussed below:

1. Voyage Policy: It covers the risk from the port of departure upto

the port of arrival. The policy ends when the ship reaches the port of

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arrival. The risk coverage starts when the ship leaves the port of departure.

2. Time Policy: This policy is issued for a particular period. All the

marine pearls during that period are insured. This policy is generally

issued for one year. In India, a time policy is not issued for more than a

year.

3. Mixed Policy: This policy is a mixture of time and voyage policies.

These policies are issued to ships operating on a particular route.

4. Valued Policy: Under this policy the value of the policy is decided

at the time of contract. The value is written on the face of the policy. The

ships are insured in this manner.

5. Unvalued Policy: When the value of insurance policy is not

decided at the time of taking up a policy it is called unvalued policy. The

amount of loss is ascertained when a loss occurs.

6. Floating Policy: When a person ships goods regularly in a

particular geographical area, he have to purchase a marine policy every

time. It involves a lot of time and formalities. The premium is called on

the basis of declarations made.

7. Black Policy: Sometimes a policy is issued to cover both land and

sea risks. This policy or ‘Policies Proof of Interest’ (P.P.I.).

8. Composite Policy: A policy may be undertaken by more than one

underwriter. The obligation of each under write is distinctly fixed. This is

called a composite policy.

27
9. Port Policy: It covers the risks when a ship is anchored in a port.

Fire Insurance

Meaning

Fire insurance was started after marine insurance. Marine insurance

was useful only to persons engaged in some kind of trade. The fire havoc

can be experienced by persons of all walks of life. The great fire of

London in 1956 destroyed 1300 houses in four days. This ‘great fire’

gave birth to fire insurance.

A fire insurance contract may be defined as ‘an agreement’ where

by one party in return for a consideration undertakes to indemnify the

other party against financial loss which the latter may sustain by reason of

certain subject matter being damaged or destroyed by fire or other define

peries upto an agreed amount.

The term ‘fire’ must satisfy two:

Conditions:

(a) There must be actual fire or ignition;

(b) The fire should be accidental. The property must be damaged or

burnt by heat or smoke without ignition it will not be covered under the

word ‘fire’.

Fire insurance has three important

Principles:

1. Utmost good faith.

28
2. Insurable interest in property.

3. Principle of indemnity.

All these principles have been discussed in detail earlier.

Kinds of fire insurance policies

There are a number of fire insurance policies to suit different

interests.

These factors are:

1. The type of risk involved.

2. The nature of property to be insured.

3. The contents of the property.

4. Occupancy hazards.

5. Exposure hazards.

6. The time element.

The following kinds of policies are generally issued for fire

insurance.

1. Valued Policy: In this policy the value of the subject matter is

agreed upon at the time of taking up the policy. The insurer agrees to pay

a pre-determined amount if the subject matter is destroyed or damaged by

fire. The principle of indemnity is not applicable to this policy. The

agreed value may be more or less than the market value at the time of loss.

These policies are generally issued for those goods or property whose

value cannot be determined after their loss or damage. These goods may

29
include works of art, jewellery, paintings, etc.

2. Specific Policy: Under this policy the risk is insured for a specific

sum. In case of property, the insurer will pay the loss if it is less than the

specified amount. It can be explained with an example: An insurance

policy is taken for Rs. 50,000 and the value of the property is Rs. 80,000.

If the property worth Rs. 40,000 is lost, the insured will get the whole

amount of loss. If the loss is upto Rs. 50,000, it will be paid in full. In

case loss exceeds Rs. 50,000 say it is Rs. 60,000 the indemnity will only

be upto the amount insured i.e., Rs. 50,000. Under this policy the insured

is not punished for getting a policy for lesser sum. The actual value of

property is not taken into consideration.

3. Average Policy: If the ‘average clause’ is applicable to a policy, it

is called average policy clause is added to penalise the insured for taking

up a policy for a lesser sum than the value of the property. The

compensation payable is proportionately reduced if the value of policy is

less than the value of the property. Suppose a person takes up a fire

insurance policy of Rs. 20,000 and the value of the property is Rs. 30,000.

If there is a loss of property worth Rs. 15,000 the underwriter pays

discourages the insured to get under valued policy.

4. Floating Policy: A floating policy is taken upto cover the risk of

goods lying at different. The goods should belong to the same person and
30
one policy will cover the risk of all these goods. This policy is useful to

those businessmen who are engaged in import and export of goods and

the goods lie in warehouses at different places. The premium charged is

generally the average of the premium that would have been paid, if

specific policies would have taken for all these goods. Average clause

always applies to these policies.

5. Comprehensive Policy: A policy may be taken up to cover up all

types of risks, including fire. A policy may be issued to cover risks like

fire, explosion lightening, burglary, riots, labour disturbances etc. This is

called a comprehensive policy or all risk policy.

6. Consequential Loss Policy: Fire may dislocate work in the factory.

Production may go down while the fixed expenses continue at the same

rate. A policy may be taken up to cover up consequential loss or loss of

profit. The loss of profits is calculated on the basis of loss of sales. A

separate policy may be taken up for standing charges also.

7. Replacement Policy: The underwrite provides compensations on

the basis of market price of the property. The amount of compensation is

calculated after taking into account the amount of depreciation. A

replacement policy provides that compensation will be according to the

replacement price. The new asset should be similar to the one which has

been lost. The amount of compensation will depend upon the market

price of the new assets so that it is replaced without additional cost to the

31
insured.

Life Insurance

Meaning

Life insurance and life assurance are two commonly used words.

While ‘life insurance’ is the proper word for life insurance, generally ‘life

insurance’ is used. In life insurance contract, the amount of the policy is

definitely paid, it is a question of time only. The policy may mature

during the life time of the assured or it may be paid on his death. Life

insurance contract is not a contract of indemnity as in the case of marine

insurance and fire insurance. The loss of life cannot be compensated and

only a specified sum of money is paid.

Life insurance contract may be defined as ‘a contract where by the

insurer, in consideration on a premium, undertakes to pay an annuity or a

certain sum of money, either on the death of the insured or on the expired

of a certain number of years’. Under the contract the sum assured in paid

to the assured if policy matures during his life time, or to the nominees of

the assured if case of his death. The policy-holder goes on paying to the

insurer a pre-determined sum of money known as ‘premium’. The

premium may be annual, half-yearly, quarterly or monthly but it must be

paid regularly during the period of policy.

How to effect Life Insurance

(i.e. Procedure)

32
 A number of steps are taken to get an assurance policy .

These steps are:

(a) Proposal: The person who wants to get

Entrepreneurship

Meaning

Entrepreneurship is the process of designing, launching, running a

new business, i.e. a setup company differing a product, process or service.

It has been defined as the “capacity and willingness to develop, organised

and manage a business venture along with any of its risk in order to make

a profit”.

Importance of Entrepreneurship

1. Development of managerial capabilities:

The biggest significance of entrepreneurship lies in the fact that it

helps in identifying and developing managerial capabilities of

entrepreneurship. An entrepreneurs studies a problem, identifies its

alternatives, compare the alternatives in the terms of cost and benefits

implications, finally choose the best alternative.

2. Creation of organisation:

Entrepreneurship results into creation of organisations when

entrepreneurs assemble and coordinate physical, human and financial

achievement of objectives through managerial skills.

3. Improving standard of living:

33
 By creating productive organisation, entrepreneurship helps in

making a wide variety of goods and services available to the society

which results into higher standards of living for the people.

Globalisation of Business

Globalisation refers to the changes in the world where we are

moving away from self contained countries and toward a more integrated

world. Globalisation of business is the change in the business from a

company associated with a single country to one that operates in multiple

countries.

Factors:

I. Historical:

The trade routes were made over the years so that goods from one

kingdom or country moved to another. The well known silk route from

last to west is an example of historical factor.

II. Economy:

The cost of goods and values the end user determine the movement

of goods and value addition. The overall economics of a particular

industry or trade is an important factor in globalisation.

III. Resources and Markets:

The natural resources like, minerals, coal, oil, gas, human

resources, water, etc. Make an important contribution in globalisation.

IV. Production Issues:

34
 Utilisation of built up capacities of production, sluggishness in

domestic market and over production makes a manufacturing company

look outward and go global. The development of overseas markets and

manufacturing plants in autos, four wheelers and two wheelers is a

classical example.

V. Political:

The political issues of a country make globalisation channelized as

per political bosses. The regional trade understanding or agreements

determine the scope of globalisation. Trading in European Union and

special agreement in the erst while Sorit block and SAARC are examples.

VI. Industrial organisation:

The technological development in the areas of production, product

mix and firms are helping organisations to expand their operations. The

hiring of services and procurement of sub-assemblies and compounds

have a strong influence in the globalisation process.

VII. Technologies:

The stage of technology in a particular field gives rise to import or

export of products or services on to a country. European countries like

England, Germany exported their chemical, electrical, mechanical plants

in 50s and 60s and exports high tech (then) goods to under developed

countries. Today India is exporting computer/software related to services

to advanced countries like U.K., USA, etc.

35
Characteristics:

I. Cultural:

Cultural globalisation occurs as people of different cultures interact

more often. Cultural globalization takes many forms. McDonald’s has

spread across the globe, bringing American food to places to all over the

world. Rather than simply serve the same food everywhere, though,

McDonalds adapts to each culture. Cultural globalisation occurs along

many different avenues, with a nation’s film, art and music increasingly

incorporating ideas from other cultures.

Communication

Increased communication, particularly through the internet, is a

hallmark of contemporary globalisation. Social networking has allowed

people from across the globe to connect and communicate in ways that

were impossible before, and the result is the wide dissemination of ideas.

Economic

Many people think of economics when they talk about

globalization. The economics of the world become increasingly

integrated everyday, as multiple national corporations both produce

goods and sell them in many countries. Products now often contain parts

built all over the world.

Political

The world politically has also become more integrated. Pre trade

36
agreements and bilateral investment treaties, such as North American free

trade agreement between the United States, Canada and Maxico, have

mushroomed between countries.

Advantages:

I. Globalisation helps to the long run average growth rate of economy

of the country through:

(a) Improvement in the allocative efficiency of resources.

(b) Increase in labour productivity.

(c) Reduction in capital output ratio.

II. Globalisation paves the way for removing inefficiency in

production system. Prolonged protective scenario in the absence of

globalisation makes the production system careless about cost

effectiveness which can be attained by the policy of globalisation.

III. Globalisation attracts entry of foreign capital along with foreign

updated technology which improves the quality of production.

IV. Globalisation usually restructure production and trade pattern

favouring labour intensive goods and labour intensive techniques as well

as expansion of trade in services.

V. In a globalized scenario, domestic industries of developing country

become conscious about price reduction and quality improvement to their

products so as to face foreign competition.

VI. Globalisation discourges uneconomic import substitution and

37
favour cheaper imports of capital goods which reduces capital output

ratio in manufacturing industries.

VII. Globalisation facilitates consumer goods industries to expand faster

to meet growing demand for these consumer goods which would result

faster expansion of employment opportunities over a period of time.

VIII. Globalisation enhances the efficiency of the banking insurance and

financial sections with the opening up to those areas to foreign capital,

foreign banks, insurance companies.

Disadvantages:

I. Globalisation paves the way for redistribution of economic power

at the world level leading to domination by economically powerful

nations over the poor nations.

II. Globalisation usually results greater increase in imports than

increase in exports leading to growing trade deficit an balance of

payments problems.

III. Although globalisation promote the idea that technological change

and increase in productivity would lead to more jobs and higher wages

but during the last few years, such technological changes occurring in

some developing countries have resulted more loss of jobs than they have

created leading to fall in employment growth rates.

IV. Globalisation has been showing down the process to poverty

reduction in some developing and under developed countries of the world

38
and thereby enhances the problem of inequality.

V. Globalisation is also posing as a threat to agriculture in developing

and underdeveloped countries of the world. As with the WTO trading

provisions, agricultural commodities market of poor and developing

countries will be flooded farm goods from countries at a rate much lower

than that indigenous farm products leading to a death blow to many

farmers.

VI. Implementation of globalisation principle becoming harder in

many industrially developed democratic countries to ask the people to

bear the pains and uncertainties of structural adjustment with the hope

getting benefits in future.

Unit II

Resources

A resource is a source or supply from which benefit is produced.

Typically resources are materials, energy, services, staff, knowledge, or

other assets that are transformed to produce benefit and in the process

may be consumed or made unavailable. Benefits of resources utilization

may include increased wealth, meeting needs or wants, proper

functioning of a system or enhanced well being. From a human

perspective a natural resource is anything obtained from the environment

to satisfy human needs and wants.

Resources have three main characteristics: utility, limited ability,

39
potential for depletion or consumption.

Types of resources

• Full-text documents.

• Journals

• Library catalogues

• Discussion lists

• Bibliographies

• Database

• Teaching resources

• etc.

Uses

• to understand object of

• improve student’s understanding of the subject.

• there would be no information that backs up the topic that the

teacher would be working on.

• resources provide in-depth understating of the subject material at

hand.

Commerce Club

The organisation of commerce club may be given an important

place in the school’s co-curricular activities. The club may be constituted

for the development of interests of the students. Every class must have a

definite aim that will contribute in the welfare of pupils, teachers, school,

40
home and society.

Objectives

1. To provide opportunities for creative activities and for the

development of leadership qualities to the students.

2. To help in developing positive out look towards different

occupations.

3. To learn public speaking, participation in debates and the other

literacy activities.

4. To provide opportunities to the students to organise functions

cooperatively.

5. To win over the shyness and stage-fear through the participation in

different activities.

6. To furnish constructive use of leisure time.

7. To identify the needs and problems of the society and finding their

solutions.

8. To develop the qualities of democratic citizenship.

9. To provide opportunities to the students for enriching their

experiences.

Organisation of Commerce Club

Every commerce club should be organised on the basis of some

rules and regulations and every number should strictly abide by it. Its

organisation may be as follows:

41
1. Parton: The head of institution should work as the parton of the

club. All types of cooperation and facilities should be provided by him

for the successful exaction of the club.

2. In-charge: A senior commerce teacher should be the incharge of

the club. He should work as a guide. He should be intellectually sound

and educationally well informed. He should behave in friendly manner

with the other members of the club not as a direction. h/she should have

the following qualities:

(a) He must be democratic in spirit.

(b) He must possess sense of humour.

(c) He must be enthusiastic.

(d) He must be a guide.

(e) Careful preparation or planning of the activities.

3. Members: If it is possible, all the students should be members of

the club but it should not be imposed on them. It should be open not only

to the students of commerce alone but others also. A nominal member

ship fill should be charged from every member.

4. Organising Committee: A committee should be formed amongst

the students, which should formulate the constitution of the club.

5. Constitution of the Club: The constitution of the club should

include the following aspects:

I. Name of the Club

42
II. Objectives of the Club

(a) To broader the outlook of students.

(b) To understand the importance of commerce in our daily life.

(c) To import the knowledge of new discoveries and inventions of

commerce to the community.

(d) To increase the knowledge of commerce.

(e) To publish different bulletins and magazine related to commerce.

(f) To provide leadership to the students.

III. Conditions and procedure of becoming the member:

(a) Any student who is interested may become a member of a club.

(b) All the members have to attend the meetings regularly.

(c) Those students who are studying other subjects related to

commerce can become the members.

IV. Means to finance the club:

There should be clear cut instructions as from where the finances

for the various activities of the club will be obtained. Membership for of

Rs. shall be paid annually in the beginning of the school year. It

should also be planned that how much will be collected fee and how and

where the money will be kept.

V. Selection of office bearers:

The following shall be office bearers of the club:

(a) Patron

43
(b) Teacher-in-charge

(c) President

(d) Vice-President

(e) Secretary

(f) Joint secretary

(g) Treasurer

(h) Editors

(i) Store-keeper

(j) Publishing-in-charge

(k) Recorder

The office bearers shall be elected by the majority of the members.

The election should take place at the first meeting of each session. Any

office observer may resign at any type by giving written notice to the

secretary. The duties and responsibilities of all the office bearers should

be clearly written.

VI. Meeting:

(a) Regular meeting should be held.

(b) Special meeting may be called by the patron/teacher-

incharge/president at any time.

(c) Agenda for each meeting shall be planned by the office bearers of

the club.

(d) Venue and times shall be well informed.

44
(e) The number of members presented in the meeting should be clearly

mentioned.

VII. Amendments:

The constitution may be amended by ¾ vote of all the members of

the club.

6. Activities: The following type of activities can be organised by the

club:

I. Conduct meetings.

II. Tours.

III. Organisation of fairs and exhibitions.

IV. Arranging extension lecturers.

V. Visit to industries.

VI. Drawing of charts, pictures & posters etc.

VII. Preparation of models.

VIII. Publish Magazines.

IX. Organisation of debates, oration and essay competition.

X. Preparation of slides and film strips.

XI. Collecting and preparing material for commerce room.

XII. Adult education programme.

XIII. Various subjects related to demonstrations.

XIV. Film shows.

Thus the proper planning and functioning of commerce club will

45
induce self confidence among the student to choose scientific occupations

and make fruitful decisions in their happy and fruitful future.

Community Resources

In the process of education, the school and the community must

work together, their must be a co-operative and collective quest. If there

is no living, dynamic relationship between the two, education will be

anaemic, unreal, unable to make any abiding impact on the mind and

character of children. As social purpose change, as the techniques of

production develop knowledge advances, as the meaning of cultural

deepens. The life of the community is powerfully influenced by all these

factors. In the present setup, the school cannot be an island in the midst of

the community – it has to be a ‘watch-tower’ not an ivory tower”. The

school must enrich the community and community must support the

school. It is the community which pays for the organization of the school

system. The immediate community is the wonderful curriculum

laboratory which provides ‘concrete’, see able and tangible resources

which are extremely ‘dynamic interesting and meaningful for the

teaching learning process of commerce.

Types:

1. Bringing school nearer to the community.

2. Taking the community nearer to the school.

1. Bringing school nearer to the community

46
(a) Field Trips:

To know the community, field trips, incursions and tours are the

most important aspect of education. They provide the students with

opportunities to have direct experience out of school. Field trips may be

undertaken for securing information, changing attitudes, creating interests

and awaking, developing appreciation, promoting ideas and enjoying new

experiences.

(b) Community Survey:

If some special aspect of the community is to be studied, in the that

case community surveys are very useful. Community surveys acquaint as

with the daily routine activities of the people. They enable us to know as

to which problem the community is facing. Which are the new trends that

are emerging in the society. All these things can be known through

community surveys. Surveys make the students realise that all of us are

dependent upon one another.

(c) Social Service Programmes:

Social service programmes can be arranged in the community.

These programmes have double advantages.

I. The recipient of service get some relief from the service.

II. Students come to know the community better.

III. Students can organize various types of clubs in the community i.e.

cleanliness clubs, health clubs etc.

47
2. Bringing Community to the School

(a) Parent teacher association.

(b) General assembly and prayers.

(c) Extending invitation to the members of the community.

(d) Exhibiting of films and other programmes.

(e) Organisation of co-curricular activities.

(f) Celebration of festivals.

(g) The school should work for the community.

Uses of Community Resources:

I. Learning is attained through senses. So, it is more solid, stable,

concrete and everlasting.

II. Learning through community resources is related to life, therefore,

it is more realistic.

III. Learning through resources is more definite and clear.

IV. Learning through community resources is functional instead of

being theoretical.

V. Enable a child to face the problems of future successfully.

VI. A sense of belonging is developed among the students.

VII. Helpful in developing appropriate human relationship.

VIII. The students get the opportunity of studying from life in the

community.

IX. Education through community resources develops the power of

48
imagination of the students.

Unit III

Achievement Test:

“An achievement test is one designed to measure a students grasp

of knowledge or his/her proficiency in certain skills”.

R.J. Ebel

Achievement test plays an important in the evaluation of students.

The term ‘intelligence’, ‘aptitude’, ‘achievement’ are commonly

used in the field of psychological and educational testing. Achievement

refers o what a person has acquired or achieved after the specific training

or instruction has been imported.

Achievement test is also known as proficiency test, is are which

measure the test of extent to which a person has acquired or achieved

certain information or proficiency as a function of instruction or training.

Achievement test are present and edumetric and past oriented. The

primary purpose of an achievement test or proficiency is to evaluate what

a person has learned. These tests are edumertic tests. In other words

achievement test are primarily designed to measure to effect of specific

programme of instruction or training.

Definition:

“An achievement test is used to ascertain what and how much has

been learnt or how well a task has been performed”.

49
 Super

“An achievement test focuses upon an examinee’s attainment at a

given point in time”.

1. Achievement test is the means to measure educational achievement

of the students.

2. It has a description of measured behaviour.

3. It is divided into different knowledge and skills according to

behaviours to be measured.

4. It is divided into different knowledge and skills according to

behaviours to be measured.

5. It is objective oriented.

6. It has vast subject matter.

7. It provides base to the teacher to plan his teaching.

8. It carries with a test manual for its administrating and scoring.

9. It is made to test teaching learning process.

10. It has intimate relation with educational objectives.

11. There is close relationship between instructional objectives,

teaching process and achievement lest.

12. It provides equivalent and comparable form of the test.

Objectivity

1. To test the learning gained by the students.

2. To provide feedback to the students in their learning process.

50
3. To provide feedback to the teachers in teaching process.

4. To measure the effectiveness of units and their organisation.

5. To classify goals of schools.

6. To evaluate, revise and improve the curriculum.

7. To diagnose backward children.

8. To plan remedial measures.

9. To diagnose needs and ability of the students.

Validity of Achievement test

The validity of a test implies that it should fulfil the objectives for

which it is meant. It means that if our aim is to measure the ability of

students to understand and apply commercial facts, then language factor

should not come in the way. Thus, it should be free from defects that

likely to affect the valid result.

Reliability

Its test is considered to be realiable if it gives same results every

time when it is used of testing the individual abilities under same

conditions. An objective test is bound to be reliable. A reliable test is not

influenced by subjective conditions, it is objective.

Forms of test items:

1. Multiple-choice type:

In this type of test several answer are gives to a particular question.

The student is asked to find out the correct answer:

51
Example: Tylon’s contribution of management is:

I. Unity of command.

II. Unity of direction.

III. Scalar chain.

IV. Science not rule of thumb.

2. Short answer type test:

In that type of test student is asked to give the answer in brief.

Example: What do you mean by Scaler chain? While writing such items

remember the following points:

I. Write question in such a way that they require a definite and

restricted answer.

II. It is always better to provide space by drawing lines or dashes for

answer.

Essay Type Test:

Essay type tests are designed to the pupils knowledge of a

particular subject as expressed in a limited number of questions of the

discussion type. In case of vast subject like commerce these tests occupy

an important place. Because they are easy to prepare and administer

pupils are provided opportunities to express themselves as fully as

possible. They can test a wide range of abilities including critical thinking

interpretation, reasoning power etc.

Types of Questions:

52
 There can be classified in two categories:

(a) Restricted Response Questions:

These types of question find to restrict both the content and form of

students response e.g.:

Q1. Write down the main process of communication?

Q2. Write the five importance of management?

Q3. Enumerate the salient features of the fifth five year plan?

Q4. Extended Resource Questions

These type of question provide full freedom to the student to

express their views. The student can write according the writing ability

and speed.

Q1. Explain in detail the importance of co-ordination?

Q2. Explain the various facts which causes unemployment in India?

Q3. Explain the general principles of management in details?

Advantages:

1. They provide more opportunity to express.

2. They are very economical.

3. It help to encourages creative thinking.

4. They also help to develops power of the pupils.

Disadvantages:

1. This type of test can reveal child’s cramming capacity only.

2. It keeps the students busy and full of nervous tension.

53
3. It does not help in discriminating the students.

4. There is place for subjectivity on the part of teachers.

Construction of Achievement Test:

• Planning of test.

• Preparation of a design for the test.

• Preparation of the blue print.

• Writing of items.

• Preparation of the scoring key and marking scheme.

• Preparation of question rise analysis.

Diagnostic Test:

The diagnosis is made to analysis of difficulties of the student in a

particular phase of work. It also reveals reliable information concerning

his weakness in order to overcome them be concentrated action for

remedial teaching. It can be used as inventory test to find out how much

the student knows about a gives phase of the subject matter.

It discover of analysis pupils difficulties with a view to setting up

specific remedial measures to correct errors and remove difficulties. The

diagnostic test items should also be give due to consideration to the

varying abilities of pupils in solving different types of problems. Before

constructing such a test a pilot study be conducted over a given area a

unit and its results statistically analysed before finalising the test.

Steps for Construction:

54
– Formulate the objective.

– Analyze the content into sub-topics.

– Identify the difficulties in the order of sub-topics.

– Analyze the items and modify them.

– Prepare manual to the test.

– Remedial devices and measures.

Thus diagnostic test results will reveal in a comprehensive way, the

exact reached by pupils and precise nature of difficulties. These tests will

help to find out the specific kind of instruction and practice that will be

required to bring achievement up to the desire level.

Uses:

1. Diagnostic tests are useful in finding out the strength and weakness

of the individuals.

2. These are helpful in finding out the causes of those problems which

remain unchecked and unremedied by formative evaluation.

3. These are helpful in locating the areas in which additional

instruction is required or in which teaching method have to be improved.

4. These are helpful in identifying the use of faculty, round about or

incorrect procedures.

5. The tests are useful to both the attainment as well as difficulties of

pupils whose achievements are not up to the mark.

6. They help in dividing pupils in the groups for special coaching on

55
remedial teaching as the case may be.

7. It provides useful feedback to the students.

8. It helps in designing course and curricula according to the

capabilities of the learner.

Qualities of Commerce Teacher:

In the words of load, “teaching is not every-body’s cup of tea”. To

become a teacher, both learning, passing the examination and his ability

to instruct are not enough the should posses a sterling chapter and certain

physical, social and professional qualities which are perquisite for success

in teaching.

Trait of a Good Commerce Teacher:

T = Thoughtful

R = Reliable

A = Abilities in leadership

I = Integrity

T = Tactful

S = Sense of humour

O = Objectivity

F = Fluency

A = Ability to do creditable institutional work

C = Co-operative

O = Optimistic

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M = Mastery over the subject

M = Man in child psychology

E = Exposition

R = Recitative

C = Conscience

E = Enthusiasm

G = Gregarious

O = Originality

O = Orator

D = Discernment

T = Thoughtful

E = Effective

A = Alter

C = Cheerful

H = Health

E = Efficient

R = Resourcefulness.

1. Qualities of Pertaining to Personality:

I. Personal Appearance: In appearance the teacher should look like

a teacher. Here we can’t limit down his physique and status.

II. Sound Mind: The teacher should have an alert and sound mind

and this is possible only with sound health.

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III. Voice and Pronunciation: The teacher should have a clear voice

with good pronunciation.

IV. A man of character: The teacher should not a slave of passion and

emotions. He should be a high moral character.

V. Qualities of Leadership: The teacher should lead his students in

every respect.

VI. Human Temperament: The teacher should always have a smiling

face and good gesture with help in creating suitable environment in the

classroom.

VII. Patience and Self-Confidence: The teacher of commerce should

have the patience and confidence to teach the required subject matter. “To

teach is to first understand purposes, subject matter structures and ideas

with in an outside the discipline”.

VIII. Positive Attitude: Good teachers always have positive attitude

cynical people usually create a negative attitude in students since they are

in a raw state of gaming and development attitude.

2. Professional Qualities:

I. Dedication to Excellence: Good teachers want the best from their

students and themselves. They don’t settle for poor graders, knowing it

reflect upon their ability to teach just as much upon a student’s ability to

excel.

II. Unwavering Support: The teachers know that everyone is able to

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do well if they have the right teachers. They don’t accept that a student is

a lost cause.

III. Willingness to help student achieve: The good teachers are those

that don’t stop teaching when the bell rings. They know that some need

extra attention or assistance, they don’t act like it’s not their job.

IV. Pride in Student’s Accomplishments: The good teachers

celebrate the accomplishment of everyone, knowing that everyone is

capable to doing well. They are upbeat and positive, focusing on how a

student did well] not how well they taught.

V. Professional Attitude: A teacher must know his profession

thoroughly. He must know his subject of commerce thoroughly. He needs

to be an expert in his field and careers out there.

VI. Sound Professional Training: Knowing his subject is of no use if

does not know how, or does not bother to, teach most effectively to his

students.

VII. Knowledge of Psychology: Commerce teacher should have

because it helps the teachers in understanding the child psychology,

individual differences, stages of mental and physical growth etc.

VIII. Respectful for diverse talents and learning styles of students:

For the development of all the students he should promote a stimulating

learning environment.

IX. Knowledge of Current Affairs: The present age is the age of

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science. The age of science is the epitome of newness and change.

Commerce provides base for the newness. Commerce teacher should

have the knowledge of current affairs.

X. Knowledge of Economic Problems: Commerce education is that

part of educational process which on one hand relates with the

occupational preparation and on the other hand relates with the

information regarding business/trading activities which is important for

every student understand the business environment and economy on day

to day life.

3. Qualities Related to Classroom Procedure:

– Use of different methods and technologies.

– Use of different skills.

– Proper use of chalk board.

– Well planned teaching.

– Proper use o f instructional aids.

– Class discipline.

– Carefully planned assignment.

– Pupils well motivated for study.

– Resourcefulness in the class.

Training of Commerce Teacher

In the modern system of education, it is must that the commerce

teacher should be well qualified and trained. If he is not possessing

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information regarding latest techniques of teaching and development in

the field of commerce, he will not be in a position to provide proper

education and training to students. To be a good teacher, he is required to

pass through these phases of training of a teacher:

1. University degree in subject of commerce: Before appointing a

person as a commerce teacher it must be seen that he has acquired

university degree in the subject of commerce. He should be M.Com and

B.Ed in commerce. For a teacher in shorthand and type-writing he must

possess degree of efficiently in these subjects from professional

institutions or from some training centre in the art of the teaching of skills.

2. Practical knowledge and experience: Along with theoretical

knowledge, practical training, knowledge, experience is also required. A

teacher cannot be a successful and impressive teacher if he is not

possessing any officer or business experience or vocational skills. As we

know practice makes a man perfect. So experience and practical

knowledge in making and handling accounts, handling of mail,

maintenance of registers, banking activities, import and export procedure,

sale and purchase of goods, handing of telephone directory, analyzing

financial statement etc. will help the commerce teacher to specific

himself in necessary skills and technical know-how of various commerce

programmes.

Thus, commerce teacher should attend a practical training or actual

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experience in service in a business firm, private office or government

office, at least for six months. Such training should be organised by

universities as apart of course.

3. Teacher Training Course: After acquiring master’s degree in

commerce the prospective commerce teacher should be given a course of

teacher training. During the course, he is give training regarding various

teaching techniques and skills, educational psychology and philosophy of

education

In India, teacher training in commerce was started in 1963-64 and

this was offered by four regional colleges of education, prior to this, the

following provision were made in this regard:

1. Training in methods of teaching elements of commerce and book-

keeping in C.I.E. New Delhi and also in Secondary Training Colleges

Bombay.

2. Organisation of Seminars and courses by Ministry of education,

Government of India during the period 1958-60.

3. Some states conducted short hand courses for training teachers who

were already in service.

4. In service training: Till 1965, no specialized training in commerce

methodology was imparted.

Commerce teachers should attend seminars, training courses,

exhibitions and workshops organized in Regional Colleges of Education

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and other training colleges. They should be in touch with latest

publications, educational philosophy, psychology and methodology of

teaching.

They should be fully equipped with latest innovation brought about

in the field of education.

Commerce teachers should develop a habit of reading latest

journals, piratical, magazines, bulletins, reports etc. concerning

commerce and related subjects.

Commerce Room:

In the present age, teaching methods of commerce have undergone

several changes. A modern teacher of commerce not only use ‘chalk’ and

‘talk’ as teaching aids but also uses several instructional aids of modern

technology. So, the separate commerce room is being felt as a dire need

where the students can easily finds reference books, commercial maps,

charts, projectors, globes, magazines, journals, typewriter, computers and

Xerose machine etc. apart from the text-book of commerce.

Commerce room is a bigger room that serves a lot of purpose such

as library, workshop, a stock room, an amative, theatre and a student etc.

Definition:

Wesley remark – “A social studies laboratory may be defined as a

room on a group of rooms which contain all written audio-visual

materials pertinent to the social ‘studies instructions”.

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Objectives of Commerce Room:

I. It develops the skill in handing the various commerce apparatus,

instruments and equipments.

II. It helps the student in developing the feting of cooperation, self

dependence and self-discipline.

III. It imparts the permanent knowledge to the students.

IV. It saves the time and energy of students because they find all the

materials at one place.

V. It provides such conductive type of environment which inspire the

students to read and learn more and more.

VI. It makes commerce teaching more effective through the use of

various teaching aids.

Needs and Importance:

I. It keeps the teacher and students active due to conducive

environment of teaching learning.

II. It develops the self-discipline habit in students.

III. It encourages the students for independent study at home because it

cares for individuals differences of the students.

IV. It provides the upto date relevant material to the students at one

place.

V. It keeps the students busy when they are free, they can use their

leisure time inself-study.

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VI. It increases the teaching efficiency in the teacher, because now he

can tech his topic conveniently due to more conductive environment of

teaching, learning.

VII. Equipments like projector, computer, typewriter will save the time

and will provide permanent base of education.

Organisation of Commerce Room:

For better organised teaching of commerce, there should be good

arrangement of four at least for smoothening the commerce teaching

activities. These rooms may be such as:

1. General Commerce Classroom: The commerce room should be

specious enough as to provide opportunity to at least 30 students to study

together. The areas of class floor should be 600 sq. feet leaving the space

at the back and front for demonstration arrangement of natural lights, the

commerce rooms should face north. The light the comes inside the

commerce room will help in the class room working to a large extent.

Glass panes, fixed window and the door will also help in approaching the

natural light. Along with it there should be good arrangement of artificial

light.

2. Separate Room for Typewriter and Shorthand: In this room

there should be a separate typewriter for each individual. Every

individual need 25 sq. Thus, the size of the room should be at least 30" ×

25" or according to the number of students. Typing-chart should be hung

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on the wall. There should be two separate black-boards. One for teaching

shorthand and second one for teaching the typewriter work to the students.

3. Room for Commerce Equipments and Materials: The room size

is usually 18" × 25" and has the enough space for the following

equipments and materials related to commerce teaching. The equipments

and materials are such as:

1. Text-book of commerce.

2. Useful parts of the typewriter.

3. Photocopier.

4. P.C. (Personal Computer) and Printer.

5. Overhead projector.

6. Fax machine.

7. Related models and charts.

8. Calculators.

9. Punching machines.

10. Wall-clock.

11. Radio

12. Tape-recorder.

13. Various business documents.

14. Various insurance forms & documents.

15. Magic lantern.

16. Rotary machine.

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17. Duplicator.

18. Datincy Machine.

19. Reference books journal and magazines.

4. Ledger Room: The normal size of account room is 23" × 35". The

following materials are kept in the ledger room for the students:

1. Teacher made models, charts hung on the wall.

2. Journals and magazines.

3. Note-books.

4. Reference books.

5. Shot-answer books.

6. Performa of house, bill and invoice etc.

7. Charts of book-keeping.

8. Performa of journal, ledger, trail balance and final accounts etc.

Advantages of Commerce Room:

1. We can arrange all the teaching aids in a good manner in the

commerce room.

2. While teaching, a teacher an use any teaching aid conveniently

because all the aids are available in the class-room.

3. Commerce students feel and assume that room as their own room.

4. Always, students try to keep the room clean and decorated.

5. Students try to bring good teaching aids related to commerce, in

the room if they see them in the market or anywhere else.

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Suggestions for Commerce Room:

1. Separate commerce room creators the teaching learning

environment in the classroom.

2. It cares for individual differences of the students. Teacher uses

various teaching aid, then he can express himself better in comparison to

traditional teaching in common room.

3. Commerce room also serves as the museum because here the

students get chances to see and operate several types of equipments.

4. This room develops the cooperative feeling and mutual

understanding among the students.

Role of Seminars:

Seminars are basically arranged to discuss current issues and

problems or to share ideas. A seminar is a small group discussion in a

formal setting with clear gender. In a seminar speaker present a theme or

a set of papers and it is discussed by all those who participate.

The chairman/chairperson of a seminar guides, directs, coordinates

and organizes the discussions in a system manner in order to optimize

time, resources and get more benefits. In a seminar, teachers can discuss

problems regarding admission, staff, development, evaluation, new idea

of teaching or relevant innovations etc. In a seminar a teacher may

contribute or paper or an idea, constructively critics or review a

conventional approach.

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 A seminar can also be organised by group of teachers. The required

resources o a seminar are finance, facilities to sit and discuss facilities to

present. The agenda of seminar to be discussed earlier the general themes

to be discussed, dates and time need to be communicated for participation

including the date, time and theme presentation.

The importance of seminars and training in improving teachers

performance;

It is the goal of Department of Education that every teacher will

become not only efficient but all effective. It is in this mission that today,

a lot of training’s and seminars are being conducted to improve and

develop the craft of each mentor in school. The department fully

understand that everything rises and falls on the teachers capabilities to

bring at the heart of every pupil.

Training’s and seminars on ICT, new method and techniques in

teachings, orientations on the K-12 Curriculum Values Formation

seminars and the likes are being held in different parts of the country so

as to prepare all the teachers in globalisation. Their attendance to these

seminars will help create an effective learning environment, improve

teaching-learning situations, keep updated on modern instructional

devices and inspire than to become better teachers in the modern world.

Since the department is offering free trainings and seminars, teachers

must goals this opportunity for self improvement.

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Role of Workshops:

It is generally organized by an institution or association in order to

develop certain instructional materials, book, resources materials,

supportive material, work book etc. Workshops can be organised to

develop certain skills of teachers.

Teachers could be trained in certain new laboratory skill, develop a

question bank, analyze question set different examinations and suggest

reforms. A workshop could mean hard and concentrated work on the part

of experienced teachers to create certain educational materials. A

workshop comprises a small, selected group of teachers or experts drawn

from actual working situations or related experts who theories on the

activities.

Projects:

Project based learning is a dynamic classroom approach in which

students actively explore real world problems and challenges and acquire

a deeper knowledge. Project based learning is considered an alternative to

paper based, note memorization, or teacher-led classroom. Proponents of

project based learning cite numerous benefits to the implementation of its

strategies in classroom-including a greater depth of understanding of

concepts, broader knowledge base, improved communication and

interpersonal, social skills, enhanced leadership skills, increased

creativity, and improved writing skills. Another definition of project

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based learning includes a type of instruction, where students world

problems in their schools and communities.

Project based learning is a comprehensive perspective focused on

teaching by engaging students in investigation. Within this frame work,

students pursue-solutions to non trivial problems by asking and refining

questions, debating ideas, making predictions, designing plans and or

experiments, collecting and analyzing data, drawing conclusions,

communicating their ideas and findings to others asking now questions

and creating artificial.

Project based learning sometimes referred to as “problem based

learning” is a unique approach to teaching students while developing their

critical thinking and problem solving skills through collaboration with a

small group of others, while combating problems and situations more

commonly faced in ‘real-life than in the class room.

Benefits:

There are many benefits or students from project based learning.

They are inspired to gain a deeper appreciation for subject at hand, and

develop an interest in during into the subject and garining one enhanced

knowledge of the subject. Studies have suggested that students who learn

in this way are better able to retain the information they learned in class,

as opposed conventional method of passive learning and note-taking. This

information can carry them through to adulthood where they can apply

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their learning experiences to solve future problems.

Unit IV

Computer Assisted Instruction (CAI)

A self-learning technique, usually offline/online, involving

instruction of the student with programmed instructional materials. CAI is

an interactive instructional technique whereby a computer is used to

present the instructional material and monitor the learning that takes place.

CAI use a combination of text, graphics, sound and video in enhancing

the learning process. The computer has many purposes in the classroom,

and it can be utilized to help a student in all areas of

curriculum.

CAI refers to the use of computer as “tool to facilitate and improve

instruction. CAI programmes use tutorials, drill, problem solving

approaches to present topics and they test the students understanding.

Typical CAI Provides

I. text or multimedia content.

II. multi-choice questions.

III. problems.

IV. immediate feedback.

V. notes on incorrect responses.

VI. summarizes students performance.

VII. exercises for practices.

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VIII. worksheets and tests.

Advantages of CAI

• one to one interaction.

• great motivator.

• freedom to experiment with different options.

• immediate feedback to answers elicited.

• self pacing-allow students to proceeds at their own pace.

• individual attention.

• learn more and more rapidly.

• multimedia helps to understand difficult concepts through multi

sensory approach.

• self directed learning students can decide when, where, what to

learn.

Limitations of CAI

• may feel overwhelmed by the information and resources available.

• over use of multimedia may divert the attention from the content.

• learning becomes too mechanical.

• non-availability of good CAI packages.

• lack of infrastructure.

Computer managed learning (CML)

The CML is an electronic management information system of

student learning. It is a significant application of computer technology for

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accountability and documentation of student progress by electronic filing,

sorting and reporting of his learning outcomes.

Definition:

“The systematical control of instruction by computer, characterized

by testing, diagnosis, learning prescriptions, and through record keeping”.

– Hofmeister

From the above the following can be said about CML.

I. Assesses the learner’s present level of knowledge.

II. Diagnoses weakness or gaps in the students learning.

III. Prescribes learning activities to remediate the identified

weaknesses.

IV. Continuously monitors progress of learner.

V. CML an improvement over manual performance record system.

VI. It is system to monitor student progress and the effectiveness of

their instruction.

Benefits of CML System:

(A) For teachers:

I. CML system treats every student as an individual and helps

teachers to follow suit.

II. allows students to be extended or remediated as required.

III. makes computer software accessible and relevant.

IV. gives back hige amounts of time from testing and marking that is

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better spent on creative student learning.

V. provides previously unknown date on which to constantly refine

and improve the teaching method.

(B) For School (Principles and Management the CMLS

I. Provides accurate measurement and analysis for informed decision

making.

II. Provide accountability and control.

III. Traps, retains and shares valuable resources developed by teachers

over time.

IV. Facilitates quality control of teaching process.

V. Allows for new goal setting in measurable education outcomes.

(c) Use for Government

I. Leverages the productivity of teachers.

II. Collects data on computer usage.

III. Fully utilizes technology resources.

IV. Allows policy to be formed and funds allocated based on

previously unobtainable data.

Multimedia in learning:

A wide range of individual educational software employing

multimedia is available on CD-ROM. One of chief advantage of such

multimedia applications is that the sequence of material presented is

dependent upon the students responses and requests. Multimedia is also

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used in the classroom to enhance educational experience and augment the

teachers work. Multimedia for education has begin to employ servers and

networks to change it frequently.

The goal of education is to facilitate learning to help student gain a

body of knowledge, acquire specific sills and functions successfully in

society. But one of the greatest challenges to educator is the diversity of

students; especially in the different ways the learn. Some students learn

better through association, other by experimentation, some are more

visually oriented, others are more auditory. Multimedia learning tools can

improve education.

The following are some of the properties of multimedia learning

tools which can improve educational outcomes:

• Enable students to represent information using several different

media.

• Involve a substantial amount of work.

• Involve open-ended assignments.

• Involve theme-based activities.

• Draw knowledge and experiences from a wide variety of sources.

• Involve interdisciplinary activities.

• Are a way to achieve high self-esteem.

• Learners become more self directed.

• Students learn to think effectively, practice problems during and

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decision making.

• Requires and rewards good planning and execution skills.

• Students are motivated to create a quality product because a wider

audience may view it.

• Multimedia skills will be useful for students in their adult lives.

Video-conferencing:

Video teleconferences is a teleconference that includes video

communications.

Video teleconferencing system transmit voice, graphics, image of

people.

It has advantage of being able to show the image of the speaker,

three dimensional objects, motion, pre-produced video footage on

account of its ability to show the images of participants, video

teleconference can create a ‘social presence’ that closely approximates

face to face interaction. This is fully interactive system that either allows

for two way video and audio, where the presenters and audience can see

and here each other, or one way video and two way audio, where

audience sees and hears the presenter and the presenter only hears the

audience.

Educational broadcasting:

Broadcast media is to educated the listening and viewing audience

given the high rate of illiteracy and how level of education prevalent in

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many developing countries. Through education adults assimilate

fundamental values and develop new ones. It is also through education

that an adult develops the capacity to contribute to the welfare of the

society. One cannot conceive of development in the absence of education

or education in the absence of development.

Objectives:

I. To inculcated informally academic, political science, religious and

economic knowledge in particular and the public in general.

II. To create a general desire for knowledge.

III. To create an awareness of acceptable life goals and values.

Educational Telecasting:

Telecasting refers to broadcast the programmes on television.

Telecast is restricted to television. Broadcast can be radio or other forms

as well. Telecast is a television broadcast, especially outside of a studio.

Telecast is to broadcast by television.

Broadcast is one signal to many receivers – everyone gets exactly

the same signal, at damn near the same time (speed of light not

withstanding). In TV or radio, the 2 most common broadcast mediums,

this means you have a big, high power autumn dumping the signal out at

a specific frequency that anyone can ‘tune in’. Broadcast can be either

analogue or digital but to my knowledge, it’s rarely if ever ‘packetized’.

Podcasting:

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 Podcasting means to digital recording of a ratio broadcast or

similar programme, made available on the internet for downloading to a

personal audio player. In other words, it is a digital audio file that is

created, shared and heard. Podcast can also be in the form of video

streamlined online, however, video podcast known as vidcast or vodcast.

Uses:

• Podcast are great alternative for delivering research content or

lessons to students who need remedial or extended support.

• Students can create their own podcast to share their learning

experiences with each other and also with other students from other

school.

• Teachers can record audio podcast to provide additional and

revision material to students to download and review at a time first

them the best.

• Podcast can highly benefit auditory learners and help them in their

learning.

• Creating podcast allow students to develop several important skills

such as researching, writing, speaking effectively, solving

problems, improving their vocabulary.

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