Organization & Management of Urban Co-operative Credit Societies in Jalna City

Transcription

1 Chapter IV Organization & Management of Urban Co-operative Credit Societies in Jalna City 4.1 Introduction 4.2 Meaning & Importance of organization 4.3 Meaning & Importance of Management 4.4 Role of Urban Co-operative Credit Societies in Jalna District 4.5 Working of the Society 4.6 Management Structure of Urban Co-operative Credit societies in Jalna city. 130

2 CHAPTER-IV Organization & Management of Urban Co-operative Credit Societies in Jalna City 4.1 Introduction: Management is a universal process in all organized, social & economic activities. Management is necessary for a business firm, govt. enterprises, education & health services, military organization, trade, association, cooperative & so on. Management skills are transferable & manager can successfully apply his knowledge & skill in a wide variety of enterprises. Management is an exercise in harmonizing men, money, machinery, materials & methods towards fulfilling of set of objectives leading to human development, excellent performance, social benefit & global welfare. Management is a continuous lively & fast developing science. Management is a universal concept & applied in all aspects of business organization. When we analyses the working of co-operatives the main causes for the failure of co-operatives is due to the lack of proper management. Co-operative shows least preference for sound business principles & professional management, as we see in the other sector. Elected non-officials cutter disregard for efficient operation & lack of sincerity have lead the co-operatives to its present level of condition. It is of great interest to know that co-operative found a place all the countries in their economic development. Co-operative organizations are functioning in all parts of the world, irrespective of the form of govt. ruling the country. This is especially so, in developing & underdeveloped countries where co-operatives are encouraged in all spheres of economic activity. When we analyses working of co-operatives in India, the main cause for the failure of co-operatives is due to lack of proper management. Co-operative can operate successfully there of no reason to doubt the efficiency of co- 131

3 operatives in delivering the good results. The fault is not with the co-operatives as an institution, but with the people managing it. The elected non-officials who are entrusted with the responsibility of managing the affairs of the cooperative always nature vested interests & try to exploit any opportunity to their own advantage at the cost of the co-operative. The employees of the cooperative lack the required skill & experience in managing the affairs of the cooperatives & they are also developed of the necessary powers & authority to undertake any meaningful work. The co-operative can not afford to have high caliber & experienced professional to manage their affairs, because they can not afford to pay them high salaries, most of the co-operatives are located in rural areas & therefore, these professionals may not go to these areas. Also the strict control & direct supervision & direction by the non-officials on day-to-day working may not be liked by the professionals. Naturally the existing staff available with the cooperatives are not motivated & not given any opportunity for development. They are also recruited according to likes & dislikes of the non officials. Thus, the personal available with the co-operatives to improve its efficiency is not able to cope up with the requirements. The co-operatives lag behind other players in the market, in all areas like skill, resources & other infrastructural facilities. They have no marketing competence as compared to others. In order to face competition, market preparedness is necessary & marketing strategies have to be formulated very meticulously. The organization & management of co-operatives aim to make cooperatives economically viable & sound business organizations rendering the services expected of them to its members & society at large. The members interests & satisfaction should receive the almost consideration of any cooperative management action. Co-operatives also have a social responsibility. Co-operatives cannot work in isolation & should take care of society needs as well as government policies & programmed. The co-operatives should also take care of other co- 132

4 operatives & work in unison with them co-operative management must ensure co-operation co-operatives in their management. 4.2 Meaning & importance of organization: Organization: The term organization may be defined as a collective entity of people who consciously engage in some activity on a sustained basis for achieving an objective or a set of objectives. Definition of organization: Chester Barnard: It is a system of consciously co-ordinate activities of two or more persons. Amitai Etzioni: an organization is a planned unit deliberately structured for the purpose of attaining specific goals. 1 A close look at the above definition & other definitions find out the following aspects about the term organization: a) It is man-made & is composed of people who have their own needs, goods, sentiments & values. b) It has an identity of its own, apart from the people associated with it. It is a distinct entity & has its own form & function. c) It is characterized by a co-operative human Endeavour activities & processes involving use of skills, resources & technology. d) The interaction, relationships & activities need to be determined coordinate & managed by a specified group of people within the entity. e) It is a goal-oriented & purposeful one or more of such goal like survival entertainment, salvation, profit prestige public service & so on. The co-operative endeavor implicit in organization involves setting common goals, division of labour some specification assumption of specific roles & behaviours by individuals & establishment of interactions. What one man can not do two can do; what one man can do, two can do better. The 133

5 growing complexity led to greater degress of formality, standardization, centralization & control. There is need to study organizations & their behavior over time so that we will be able to identify our own status in relation to them & so that we can adjust & adopt ourselves with their influence, as also to participate in their activities in a meaningful manner. Importance of organization: It facilitates precise delegation of authority. It provides effectives communication. It helps in equitable distribution of work. It helps in smooth management & Administration. It is the best mechanism for managerial leadership. Coordination & control. It helps to boost co-operation & higher employee morale. It helps to increase managerial efficiency e.g. quick disposal, minimum interdependent rivalry or friction absence of divided responsibility, effective communication etc. It helps steady growth & diversification. Maximum utilization of human & capital. It ensures accomplishment of objectives & strategies. Optimum use of technological improvement e.g. automation & computerization. Ample scope for the training & development of managers e.g. job rotation, job enlargement delegation etc. It encourage creativity i.e. resourcefulness independent thinking, initiative, spirit of innovation etc. 134

6 4.3 Meaning & importance of Management: A human organization is not a natural system in the sense that its functioning is not directed by any invisible force. It is an artificial creation & innovation of human ingenuity & hence has to be directed by a specific organ, which may be referred to as management. An organization is a man made entity of co-operative group effort, some one has to take charge & coordinations its activities in a meaningful manner. An individual or a sub group which takes charges of the organization & directs its activities is its management. Definition of Management: Peter Ducker: management is a function, a discipline a task to be done & managers practice this discipline, carry out the functions & discharge these tasks. Robert Albanse: management is the work of creating & maintaining environments in which people can accomplish goods efficiently & effectively. Joseph Massie: Management is the process by which a co-operative group directs actions towards common goals. Theo Haimann & William Scott: Management is a social & technical process that utilizes resources influences human action & facilitates changes in order to accomplish & organizations goals. Henry Sisk: Management is the co-ordination of all resources through the process of planning, organizing, directing & controlling in order to attain stated goals. Management refers to an integrated set of functions & processes designed to initiate & unify group effort in a meaningful manner directed towards pursing certain goals. It involves mobilization & utilization of physical human & other needed resources in judicious manner through certain skills, techniques & activities. They also include adoption of certain techniques, tools & methods for carrying on activities, through articulation of skills & efforts of 135

7 organizational personal in a unified manner & installation of communication & control systems to ensure that what is planned is achieved. Management has to also facilitate organizational change & adaptation. It has to also work for resolution of organizational conflicts. Functions of Management or the elements of management process as follows: Planning Organizing Staffing Directing Controlling An organization becomes a unified functioning system when management systematically mobilizes & utilizes the diverse resources. Management is a critical variable & a vital sub-system in an organization. The survival & success of an organization depend to a large extent on the competence & character of management. Planning: Planning is a process which begins with objective definition, strategies, policies & detailed plans to achieve them. Planning is to decide in advance, what is to be done in future course of operation it focuses on making things happen. It is first managerial function. Planning decides everything regarding the new enterprises in advance planning involves the determination of objective based on intelligent forecasting & development of precise programme to achieve the objective planning sketches complete mental picture of the things yet to happen in the enterprise through the process of looking ahead. Planning is an intellectual the conscious determination of course of action the basis of decision on purpose facts & estimates. Koontz and O Donnell. 136

8 Management planning is a development of forecast objectives, policies, programmes, procedures, schedules & considered budgets. Louis and Allen. Planning is determination of what is to be done how & when is to be done, who is to do it & how results are evaluated. James Lundy. Organizing: After planning of any thing to establish mutual relationship between different constituents of the organization is important. Organization includes recruitment of personal management distribution of work between directors & managers training of personal etc. decentralization of power makes administration sound. Staffing: Staffing is that part of management process which is concerned with recruitment, selection placement, utilization & development of employees. It involves the scientific & systematic procurement, allocation, utilization, conservation & development of human resources. Staffing is the whole personal function of bringing in & training the staff & maintaining favorable conditions of work. Directing: In absence of direction, sub-ordinates will not know what to do, how to do & when to do & they will remain idle. Directing is done at every level of management. It is continuous activity or process. It establishes direct contact over sub-ordinates. It has wide dimensions. Directing is mainly concerned with impersonal relationships within an organization. Direction includes issuing orders, instructions, & guidance enforcing discipline & entrancing the team spirit. Direction means management in action Henry Fayol. 137

9 Direction consists of the process & techniques utilized in issuing instructions & making certain, that operations are carried on as originally planned. Theo Haiman. Direction is motive to action. George Theory. Controlling: Control is a strategic process to motivate people to work as per the norms of acquisitions & standards contained in plans. The interdependent activities like production, marketing finance & cost control are linked up & a comprehensive management process is established through control process. Control is not only a negative activity of locating the inefficiency or restricting the freedom of people, but it is a constructs activity of adopting the effective process, improving the results by taking necessary corrective measures. Control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued & principles established. Henry Fayol. Control implies measurement of accomplishments against the standard & the corrections of deviations to assure attainment of objectives according to plans. Kontz & O Donnel. 4.4 Role of Urban co-operative credit societies in Jalna District: The urban credit societies may be called miniatures of urban banks. Many of the urban banks have originated from urban credit societies. 1) To organize & bring together the middle & working classes in urban & semi-urban areas & inculcate in them the habits of thrift, saving & selfhelp. 2) To raise resources t meet the credit needs of the middle & working classes in connection with domestic urgent needs consumption purposes etc. & of the petty shopkeeper s merchants & small industrialists etc. at 138

10 reasonable rates of interest wit the object of saving them from the chinches of usurious money lenders. 3) To ameliorate the living conditions of the people in urban areas of Jalna city. 4) To promote the welfare of members in Jalna city. Objectives: The objectives of these societies are as follows: 1. To promote thrift self-help & mutual co-operation among the members. 2. To receive deposits from members. 3. To raise funds by means of share capital entrance fees, subscriptions deposits from members loans, donations & financial assistance. 4. To grant loans to members against personal security or other securities. 5. To procure housing accommodation either on ownership basis or hire basis for the use of the society with the approval of the Registering authority. 6. To grant loans & advances for developing cottage & small-scale industries as also for employment generating purpose. 7. To undertake all such activities as are incidental to the fulfillment of any or all of the above objectives. 4.5 Working of the society: The working of the society includes: 2 1. Admission of members & issue of shares to them. 2. Transfer of shares. 3. Arrangement of AGM & Board of directors meeting time table. 4. Acceptance of resignation from membership. 5. Acceptance of deposits of various types. 6. Sanction of loans for different purposes against different securities. 139

11 7. Supervision over loan issued. 8. Recovery of loans including overdues if any. 9. Investment of surplus funds of the society. 10. Maintenance of proper accounts of the transactions of the society as also the maintenance of the books & registers as prescribed under the cooperative societies act & rules. 11. Distribution of profit & such other activities are directly related to or incidental to the various matters mentioned above. 4.6 Management structure of urban co-operative credit societies in Jalna City. Chart No. 4.1 Management structure of urban co-operative credit societies in Jalna City Annual general meeting Chairman Board of Directors Chief Executive Officers & General Manager Department Heads Chief Officer (Law) Revenue Accounts Investment Brach Manager Assistant Brach Manager / Officers Audit Recovery Chief Officer (Admin) Staff 140

12 Annual General Meeting: The board of the society under a resolution shall within 6 months offer the close of the corresponding year call the annual general meeting at the principal place of followings for the purpose of :- 3 Consideration of the audited statement of accounts. Consideration of the audit report & annual report. Consideration of the audit compliance report. Approval for appointment of auditor & finance of remuneration. Review of operational deficit if any. Creation of specific reserves & other funds. Approval of the annual budget. Review of actual report & accounts of subsidiary institution if any. Creation of specific reserves & other funds. Approval of the long term perspective plan of the annual operational plan. Review of annual report & accounts of subsidiary institutions if any. List of employees who are relatives of members of the board or of the chief executive. Amendment of bye-laws, if any. Formulation of code of conduct for the members of the board & officers. Election & removal of members of the board, if any. Consider statement showing details of loans or goods on credit if any given to any director or to the spouse of the directors or his / her son or daughter during the preceding year or outstanding against any of them; Any other matter laid before it by the board of directors. The voting in the general body meeting shall be held as per the provisions of the co-operative credit societies act. 141

13 Chairman and Vice-chairman: There shall be a chairman & vice-chairman / Chairman elected by the board of Directors from among themselves. The chairman & in his absence the vice-chairman shall preside over the meeting of the general body & the board of Directors. The terms of office of the Chairman & vice-chairman shall be coterminous with the term of elected members of the board unless chairman or vice-chairman / chairman cease to be a Director earlier. In case of any vacancy within this period the board shall fill up the vacancy through re-election for the unexpired term of the board. Powers & Duties of Chairman: Powers of chairman: 1. To conduct & regulate the course of its proceedings at the meeting. 2. To decide the priority of the speakers. 3. To regulate their speeches. 4. To get disorderly persons ejected. 5. To order & take poll. 6. To decide the manner of polling. 7. To exclude certain matters from the minutes if it is irrelevant & detrimental to the society etc. Duties of chairman: 1. To see that meeting is duly & properly constituted in accordance with rules & procedures. 2. To see that the business is conducted in accordance with the agenda. 3. To maintain order & discipline in the meeting. 4. To ensure whether the motions & amendments should be within the scope of meeting. 142

14 5. To discuss any matters concerned with the motion. 6. To act impartially & to take care of the organization. 7. To accept valid demand for poll & arrange for the same. 8. To declare the closure of the meeting. 9. To ensure that correct minutes are entered by the secretary in the minute books to sign them. Board of Directors: Functions, Rights & Duties of Board of Directors / Board of Management: 1. Admission of new members & allotment of shares. 2. Approval of transfer of shares. 3. Preparation of guidelines for the conduct of operation as per byelaws rules & acts. 4. Approval of annual budget & its submission to general body. 5. Sanction of the expenditure for the management of co-operative within the allotted budget. 6. Ensuring maintenance of records & its submission to the registrar cooperative societies as may be required under the act & rules. 7. Raising resources as laid down for managing the affairs. 8. Sanctioning investment of funds. 9. Sanction of loans & advances to members & laying down terms & conditions for the same. 10. Acquiring & creating such assets & liabilities as may be required for the running of the co-operatives within the laid down terms & conditions. 11. Arranging & undertaking such other activities for the running of the cooperative. 12. Appointing qualified & non-qualified staff, other agencies if necessary. 143

15 13. To create sub-committee or executive committee or other committees necessary & delegate or give necessary powers to the same. 14. Selection of chairman our of board of directors (members) Chief Executive: The Managing Directors shall be chief executive of the societies & shall be appointed by the board & shall aid to assist the board of directors in the functions. He / she shall be member of all the committees, sub-committee & sub-groups of the board of directors as may be constitute under sub section (I) of section 53. Departmental Heads: There shall be seven departmental heads, which are as follows: 1. Chief Officer (Law) : The Chief Officer (Law) shall be responsible foe all matters relating to law. 2. Revenue : Revenue departmental head shall work for finding the new avenue for the growth in the profit. 3. Accounts : The account departmental head shall responsible for recording of day to day transactions of the society in the appropriate books of accounts. 4. Investment : The investment departmental heads shall find out the new opportunities for investment of surplus funds of the society. 5. Audit : The audit departmental head shall be responsible for the audit of books of accounts within the specific period. 6. Recovery : The task of recovery head is very important. It shall takes all the necessary 144

16 steps for the recovery of the loans given by the society. 7. Chief Officer (Administration) : The Chief Officer (Administration) shall be responsible for day to day administration. Branch Manager: The head of the branch that is responsible for the day to day transaction of the branch. Staff: The staff members shall be responsible for day to day performance of their duties which will be strictly according to the code of conduct. References: 1. Books Board of studies of ICAI, India, i.e. organization & management. 2. Personal Discussion with Managers of Urban Co-operative Credit societies selected for study. 3. Manual published by Urban Co-operative Credit societies in Jalna city. 145