This has become a very popular definition of management for several reasons. Firstly, this definition is very simple and easy to understand. Secondly, it highlights the indirect nature of a manager's job. A manager does not operate a machine or sell a product himself. Rather he guides others in producing and selling goods and services. Thirdly, this definition reveals that a manager is the leader of people working under him. Fourthly, it states that management is basically an art or practice of achieving results. The above definition is, however, inadequate for the present day concept of management. It suffers from the following drawbacks. (i) This definition does not reveal that management is a science. The modern concept of management is much wider than simply a skill in getting things done through other people. Since the days of F.W. Taylor management has become a science based on certain fundamental principles. (ii) The above definition does not highlight how does management get things done through people. It fails to reveal the functions of a manager and the skills used for getting things done. (iii) This definition does not recognize the role of human beings. It treats people as mere tools forgetting results and does not consider their feelings, emotions and needs. People are inanimate objects and cannot be treated as mere tools. People have their aspirations and are not mere commodities or means to achieve certain ends. Management is certainly much more than just getting things done through others. (iv)The above definition gives an impression that management gets things done by hook or crook. Results alone are not significant. The means employed to achieve results are equally important. This definition is of man's putative character. (v) This definition does not reveal that a formal organizational set up is needed for getting things done.
A careful analysis of the above mentioned definitions reveal the following important characteristic feature of a Joint Stock Company. 1. An artificial person: -
The company enjoys all the rights as a citizen of a country would enjoy. It 'can own properties, enter into contracts etc. 2. Legal formation: -
The formation of a Joint Stock Company is governed by the rules and regulations laid down in the Companies Act, 1956. 3. Voluntary organisation: -
It is formed by members voluntarily joining the organisation and contributing money or money's worth for the business. 4. Separate legal entity: -
The Company has a separate legal existence. The owners are different from the people who manage the business. The management is however headed by owners who are elected directors. The company is separate from the persons who own it. The company cannot be held responsible for any misdeeds of the members. 5. Perpetual succession: -
Unlike Sole proprietorship and Partnership, the Company has continuous existence. The continuity of the business is not affected by the death, insolvency or insanity of any member. "Men may come and men may go, but a company will go until it is wound up." 6. Limit to liability: -
The liability of the members of a company is restricted to the extent of the unpaid value of the shares held by him. The personal asset of a shareholder cannot be used to pay the company's liabilities. 7. Large capital: -
A Joint Stock Company can generate huge amount of money towards capital, because the number of persons contributing towards capital are more in number when compared to Sole Proprietorship or Partnership organisation. 8. Large scale operation: -
Since huge amounts are collected as capital, the operation of the business will generally be on a large scale basis. 9. Transferability of shares: -
The shares of a Joint Stock Company are easily transferable from one person to another, since it is a Public Limited Company. The shares of a Private Limited Company or Government Company are not transferable. 10. Common seal: -
The company, being an artificial being,...