1) Difference between management and administration
Points of Difference Administration Management
Level of Authorities At the top-level administrative function dominate over managerial function. More authority at top level. Managerial function are more than administration at the bottom level. More authority at bottom level.
Nature of organisation It forms the organisational structures and exercises control over the enterprise. It uses organisation for the achievement of the targets fixed by the administration.
Decision making Prompt decision because no need of advises. Delay in decision because these needs advise of specialists.
Usage The word administration is used in non-business activities like government departments, Military organization, social cultural and religious organization. The term management is applicable in business enterprises.
Type of work Administration is thinking function. Management is doing function.
2) Difference between levels of Management on the basis of functions
S.NO Points of Difference Top Level Management Middle Level Management Supervisory Level Management
1 Time Range It covers long span of period It covers intermediate range It is concerned with short period
2 Skills It requires creative skills It needs persuasive skills It is concerned with operative skills
3 Evaluation It is difficult to evaluate its achievement It is less difficult to evaluate its performance It is easy to evaluate its performance
4 Persons It involves few persons It concerns moderate number of persons It is concerned with large number of persons
5 Policy formulation It is concerned with the formulation of policies to a greater extent It is moderately concerned with formation of policy It is Least concerned with policy formulation
3) Difference between co-operation and co-ordination
S.No Points of difference Co-operation Co-ordination
1 Freedom It depends upon the sweet will of the individuals. They may or may not co-operate Co-ordination is planned and entrusted by the central authority. It is obligatory upon the employees and departments to honour it.
2 Supremacy Co-operation may be termed as a part of the co-ordination. Co-ordination is wide enough to channelise the efforts the individuals, departments and groups to the desired direction.
3 Relationship co-operation establishes informal relationship. Both formal and informal relations are established.
4) Difference between Management and Organisation
S. No Points of difference Management Organisation
1 Objective Management aims to achieve the general objective of the business i.e., maximum output at minimum cost. Organisation aims at achieving effective co-ordination and co-operation. between physical and human resources.
2 Scope Management has a wide scope Organisation is one of the functions of management
3 Level There are three levels in management – Top, Middle and Lower Organisation work is in the middle level and extends to lower levels of the organisation
4. Activities Management helps administration to achieve the objectives set by it. Organisation helps management in deciding who has to do a particular work in the business.
5) Difference between Unity of Direction and Unity of Command
S. No Points of difference Unity of Command Unity of Direction
1 Guiding Principle One subordinate and one boss One head and one plan
2 Aim Aims at avoiding duplication overlapping and confusion and fixes responsibility. Aims at coordinating group efforts and brings uniformity in the work.
3 Emphasis It stresses the need for the subordinate to be accountable to the boss. It emphasis the attainment of common goal under one head.
6) Difference between Line Organization, Line and Staff Organization and Functional Organization.
S. No Points of difference Line Organization Line and Staff Organisation Functional Organisation
1 Simplicity Very Simple Simple Not Simple
2 Work Load on Managers High work load Moderate work load Uneven work load
3 Suitability It is suitable for all types of enterprises It is suitable for large and medium sized enterprises Suitable for large enterprises
4 Economy It is highly economical It is moderately economical It is not economical
5 Degree of specialization Specialization is low Specialization is medium. Specialisation is high.
7) Difference between Line Organisation and Staff Organisation.
S. NO. Points of Difference Line organization Function Organisation
1 Nature of authority Authority is centralized at the top Authority is decentralized among different bosses
2 Unity of Command Unity of command is strictly followed Unity of command is not followed
3. Classification Line organization has two types pure and departmental Functional organization has no types.
4. Nature of responsibility Clearly established Responsibility is distributed.
5 Discipline Rigid discipline Liberal discipline
6 Nature of Management Simple method of management Complex method of management
8) Differences between Formal and Informal Organisation.
S.No Basis Formal Organisation Informal Organisation
1 Formation It is the result of company’s rules, policies and regulation It is the result of working together
2 Purpose It achieves pre-determined purpose It has no pre-determined purpose
3 Authority and Responsibility It is well thought, predetermined and made known to individuals It is spontaneously and automatically developed. It is unpredictable
4 Degree of rigidity It is more rigid. It is more flexible
5 Leadership Managers are leaders Leaders are voluntarily chosen
6 Flow of authority Authority flows vertically Flow of authority is horizontal
7 Goal It intends to achieve organisational goals It provides social satisfaction to people.
9) Distinguish between delegation of authority and decentralization of authority.
S. No. Basis Delegation of Authority Decentralisation of Authority
1) Concept It is a process of granting authority to a subordinate to get a particular work done. It is the end result of delegation of authority and the creation of and disposal of authority responsibility as between a manager and his subordinate.
2) No. of Persons involved It is confined to a manager and his immediate subordinate in a work unit. It involves all managers at all levels. It indicates relationship between top management and various other department and sub departments in the organization
3) Objective To reduce the burden of the manager To prepare the organizational head of the unit for handling major expansion of its activities.
4) Purpose The purpose of delegation is the multiplication of the manager. Purpose of Decentralisation is to increase subordinates’ role in the Organisation and achieve the objective of the business.
5) Stability The authority delegated can be easily withdrawn The decentralisation cannot be easily withdrawn
10) Distinguish between ‘recruitment’ and ‘selection’
S. No. Basis Recruitment Selection
1. Meaning Recruitment is an activity of establishing contact between employer and applicants. Selection of employees is the process of picking up more competent and suitable candidates for the job.
2. Objectives. Encourage large number of candidates to apply for the job. Selection aims to rejecting unsuitable candidates, so far the most competent candidate is available at every stage.
3. Stages Identifying the suitable candidate and motivate them to apply for the various jobs in the organisation. In selection more stages involved such as, Application blank, Selection test, Interview, Medical tests ,References etc
4. Time It is less time consuming It is more time consuming
5. Process It is a positive process It is a negative process
6. Economy Recruitment enjoys economy of time. Selection is expensive.
11) Difference between Internal and External Sources of Recruitment
S. No. Basis Internal Sources External Sources
1. Meaning It is the process of recruiting employees from within enterprise It is the process of recruiting employees from outside the enterprise.
2. Basis Generally based upon seniority of employees Normally based upon the merit of the employees.
3. Time Involved It is less time consuming It is more time consuming
4. Economy Internal sources of recruitment enjoy economy of time. External sources of recruitment are expensive.
5. Quality of Recruitment Quality of recruitment is not superior Quality of recruitment is superior
12) Difference between Training and Development
S. No. Basis Training Development
1. Meaning Training is an activity to increase understanding, skill and attitude to perform specific jobs in better ways. Development means the growth of employees at every level of management by a planned and organized process.
2. Aim The aim of training is to improve the skill of the employee in performing the job. The best possible utilization of employees’ capability is its main aim.
3. Scope Training is the part of development and also limited in its scope. Development is a wider term it includes education learning and training.
4. Duration Training is imparted for a fixed period Development is a continuing process and a never-ending process.
13) Difference between Time Rate and Piece Rate Wage System
S. No. Basis Time Rate Piece Rate
1. Basis Wages are determined on the basis of time Wages are determined on the basis of number of units produced.
2. Efficiency Wages are not linked with the efficiency of the workers Wages are directly linked with the efficiency of the workers.
3. Quality Quality of work tends to be high. Quality of work tends to be low
4. Wastage There is less chance of wastage of materials There is more chances of wastage of materials
5. Supervision Close supervision is required. Close supervision is not required.
6. Cost Cost of maintenance is low. Cost of maintenance is high.
7. Attitudes of Trade Union Trade Unions prefer it. Trade Unions Oppose it.
8. Security Provides sense of security to employees as the wages are assured. There is a feeling of economic insecurity since wages depend on the output.
14) Difference between Management and Leadership
S. No. Basis Management Leadership
1. Scope Management has wider scope. It plans, organises, directs and leads the business activities Leadership is a part of management
2. Authority Management directs the employees through the formal authority Leader exercises his leadership through informal activities.
3. Relationship There is authority responsibility relationship between the manager and the subordinates. There is relationship between the leader and the follower
4. Stability Management is generally stable Leadership is never stable.
5. Importance Management is necessary in every enterprise. Leadership is not essential
6. Structure Management has formal structure Leadership may be both formal and informal.
15) Difference between Direction and Supervision
S. No. Basis Direction Supervision
1. Scope The Scope of direction is wide, It includes supervision, motivation, communication &leadership Supervision is a part of direction hence its scope is limited
2. Level of Management Direction is generally at top level Supervision is the job of the lower level management
3. Framing policies Direction being at the top level formulates policies and takes important decisions. Supervision being a lower level management function it is involved in the execution of the policy
4. Incentives Direction makes the provision of financial and non-financial incentives. Supervision cannot provide incentives but can recommend the employees for reward.
16) Difference between Formal and Informal Communication.
S. No. Points of difference Formal Communication Informal Communications
1. Verbal and written It is written communication. It is verbal communication.
2. Direct/Indirect It is based upon indirect written documents It is based upon direct gestures.
3. Scalar Chain It follows the chain of command It does not follow the chain of command.
4. Proof A proof of sending formal communication is kept. There is no proof for sending it.
5. Authenticity Messages are authentic. Message may not be authentic.
6. Speed It is not as fast as informal communication. It is faster in speed
17) Difference between Oral and written Communication.
S. No. Points of difference Oral Communication Written communication
1. Form Messages are verbally transmitted Messages are transmitted in writing
2. Time Taken Messages can be exchanged very quickly Exchange of messages takes lot of time.
3. Expenses It is economical It is expensive
4. Responsibility Responsibility cannot be fixed. Responsibility can be fixed.
5. Language Language problem is not very serious Language problem is very serious
18) Difference between under-capitalisation and Overcapitalisation
S. No. Points of difference Capitalisation Capital structure
1. Meaning Capitalisation in a narrow sense is the sum total of capital raised through shares, debentures & earnings. Capital structure is the make up of capitalisation. i.e., shares, debentures, bonds & loans etc.
2. Classification. Capitalisation is classified as over capitalisation and under capitalisation Capital structure may be high geared and low geared.
3. Influence Capitalisation is mainly influenced by the internal requirements of the enterprise Capital structure is mainly influenced by the external forces, such as market conditions, investors., etc.
4. Type of funds Capitalisation represents quantity of funds. Capital structure represents quality of funds.
19) Difference between Fixed Capital and Working Capital
S. No. Points of difference Fixed Capital Working Capital
1. Period Fixed Capital is required for longer period Working Capital is required for Short period
2. Uses Fixed capital is required for acquiring fixed assets It is required for buying current assets.
3. Utilization Capital is blocked and sunk in the business. It is not available for routine business activity. Capital is working and revolving so always available for routine business activities.
4. Source Raised through shares, debentures and loans. Raised through cash sales, collection from debtors, overdraft etc.
20) Difference between Capital Market and Money Market
S. No. Points of difference Capital market Money Market
1. Meaning The market dealing in the long and medium term is known as capital market. The market dealing in short term funds is known as money market.
2. Amount of fund The capital market arranges large amount of funds. The money market arranges small amounts of funds.
3. Use of Funds The capital market makes fund available for investment in fixed assets. The money market makes fund available for routine expenses or working capital.
4. Periods Funds may be used for 7 to 25 years on long-term basis. And 1 to 6 years on medium term basis. The use of funds is restricted to 1 year.
5. Scope It has limited scope. It has widely distributed market.
6. Rate of interest Rate of interest in this market is generally low. Rate of interest in this market is generally high.
7. Instruments examples Shares, debentures, bonds etc. Commercial bills discounting, treasury bills, commercial papers etc.
21) Distinction between Investor and Speculator
S. No. Points of difference Investor Speculator
1. Meaning An investor is a person who buys the securities A speculator is person who enters into contract for buying and selling the securities, however does not actually buy or sell the securities.
2. Objective An investor is interested in regularity of income and safety of funds and appreciation in the value of investments A speculator is interested in making quick profit by changing price.
3. Delivery of securities The securities are delivered by the sellers to the purchasers Delivery of securities does not take place.
4. Payment Immediate payment is made for the securities Payment is not made immediately and the difference is made on the settlement date.
22) Difference between Under Capitalisation and Over Capitalisation
S. No. Points of difference Under capitalisation Over capitalisation
1. Meaning Under capitalisation is a situation, wherein the company has insufficient capital but large amount of secret reserve Over capitalisation is that phenomenon of a business enterprise, wherein long-term funds, (share capital, debenture and loans) exceed the amount of optimum capitalisation
2. Earnings Higher rate of earnings Lower rate of earnings
3. Credit worthiness Higher rate of earning increases credit worthiness Lower rate of earnings due to lower rate of earnings
4. Competition Facilitates competition owing to high rate of dividend/ earnings. Discourages competition owing to lower earnings.
5. Goodwill Goodwill increases Goodwill or reputation is lost.
6. Income Regular Income is assured. Return is uncertain and irregular.
23) Difference between Primary and Secondary Market
S. No. Points of difference Primary market Secondary Market
1. Meaning It is a market wherein funds are raised through shares, debentures and bonds buy industrial enterprises. It is a market which creates liquidity. It facilitates transfer of ownership of securities. It makes purchases and sale of securities easy.
2. Issue Deals with the fresh issue of shares Deals with the shares already issued by the different companies
3. Objective Helps in raising funds for the company Helps in liquidity of shares for the investors
4. Origination Primary Market originates first Secondary market supports the primary market.
24) Distinction between Speculation and Gambling.
S. No. Points of difference Speculation Gambling
1. Study Speculative activities are based upon the careful study of the stock market. Gambling is based upon chance event. No intelligence is involved in gambling.
2. Legality Speculation is legal Gambling is an unlawful, void and not enforceable in the court of law.
3. Benefits Speculation is beneficial to the economy. Gambling has no benefits to the economy. It is anti-social.
25) Distinction between Broker and Jobber
S. No. Points of difference Broker Jobber
1. Dealings The broker does not deal in securities in his name. Jobber deals in his own name.
2. Remuneration The broker gets commission from both buyer and seller Jobber earns profit from his dealings
3. Medium The broker works through the medium of jobber. The jobber does not need the broker to deal.
4. Channel Broker is the channel between the investor and the jobber The jobber is a channel between the broker, Investor and Stock Exchange.
26) Distinction between marketing and selling:
S.No Basis Marketing Selling
1 Meaning Marketing means all customers’ wants satisfying efforts concerning with planning, pricing, promoting product and services Selling is the transfer of ownership and possession of the goods to the purchasers
2 Objective It refers to integrated approach towards achieving long-term goals. It refers to piece meal approach to achieve short-term goal.
3 Emphasis Emphasis is on the customers’ satisfaction Emphasis is on the selling of the product
4 Beginning Marketing begins with consumers determines the needs of the consumer first than producer accordingly. Commodities are produced and after wards efforts are made for their profitable selling.
5 Stage Marketing is in its initial stage, what customers wants, and produces such goods that would satisfy the consumers’ wants. Or in other words marketing starts with the consumer and ends with the consumer Selling starts after the production of the goods and efforts are made for their profitable sale.
27) Distinction between Advertising and Sales Promotion
S.No Basis Advertising Sales Promotion
1 Meaning Advertising is an effort to create & sustain the demand of the product. Sales promotion is an effort to stimulate consumer to purchase more and more of a commodity.
2 Influence Advertising influences consumer. Sales promotion is an attempt to influence channel of distribution.
3 Mailing Advertising literature is directly mailed to the consumer Sales Promotion literature is generally mailed through middlemen, dealers, retailers, etc.
4 Orientation Advertising is consumer oriented activity Sales promotion is product-oriented activity.
28) Distinction between Advertisement and Personal selling:
S.No Basis Advertisement Personal Selling
1 Coverage Advertisement covers vast area Personal Selling is restricted to specific customer.
2 Cost Advertisement is less costly Personal Selling is more costly.
3 Media Advertisement establishes impersonal contact. Salesmanship is the media of personal contact.
4 Variation Advertising media can vary from time to time. There are not much variations in case of Personal Selling.
5 Contact Advertising is the method of mass influencing Personal Selling is the media of individual contacts.
6 Sale Advertising does not result in immediate sale Personal Selling results in immediate sale
Points of Difference Administration Management
Level of Authorities At the top-level administrative function dominate over managerial function. More authority at top level. Managerial function are more than administration at the bottom level. More authority at bottom level.
Nature of organisation It forms the organisational structures and exercises control over the enterprise. It uses organisation for the achievement of the targets fixed by the administration.
Decision making Prompt decision because no need of advises. Delay in decision because these needs advise of specialists.
Usage The word administration is used in non-business activities like government departments, Military organization, social cultural and religious organization. The term management is applicable in business enterprises.
Type of work Administration is thinking function. Management is doing function.
2) Difference between levels of Management on the basis of functions
S.NO Points of Difference Top Level Management Middle Level Management Supervisory Level Management
1 Time Range It covers long span of period It covers intermediate range It is concerned with short period
2 Skills It requires creative skills It needs persuasive skills It is concerned with operative skills
3 Evaluation It is difficult to evaluate its achievement It is less difficult to evaluate its performance It is easy to evaluate its performance
4 Persons It involves few persons It concerns moderate number of persons It is concerned with large number of persons
5 Policy formulation It is concerned with the formulation of policies to a greater extent It is moderately concerned with formation of policy It is Least concerned with policy formulation
3) Difference between co-operation and co-ordination
S.No Points of difference Co-operation Co-ordination
1 Freedom It depends upon the sweet will of the individuals. They may or may not co-operate Co-ordination is planned and entrusted by the central authority. It is obligatory upon the employees and departments to honour it.
2 Supremacy Co-operation may be termed as a part of the co-ordination. Co-ordination is wide enough to channelise the efforts the individuals, departments and groups to the desired direction.
3 Relationship co-operation establishes informal relationship. Both formal and informal relations are established.
4) Difference between Management and Organisation
S. No Points of difference Management Organisation
1 Objective Management aims to achieve the general objective of the business i.e., maximum output at minimum cost. Organisation aims at achieving effective co-ordination and co-operation. between physical and human resources.
2 Scope Management has a wide scope Organisation is one of the functions of management
3 Level There are three levels in management – Top, Middle and Lower Organisation work is in the middle level and extends to lower levels of the organisation
4. Activities Management helps administration to achieve the objectives set by it. Organisation helps management in deciding who has to do a particular work in the business.
5) Difference between Unity of Direction and Unity of Command
S. No Points of difference Unity of Command Unity of Direction
1 Guiding Principle One subordinate and one boss One head and one plan
2 Aim Aims at avoiding duplication overlapping and confusion and fixes responsibility. Aims at coordinating group efforts and brings uniformity in the work.
3 Emphasis It stresses the need for the subordinate to be accountable to the boss. It emphasis the attainment of common goal under one head.
6) Difference between Line Organization, Line and Staff Organization and Functional Organization.
S. No Points of difference Line Organization Line and Staff Organisation Functional Organisation
1 Simplicity Very Simple Simple Not Simple
2 Work Load on Managers High work load Moderate work load Uneven work load
3 Suitability It is suitable for all types of enterprises It is suitable for large and medium sized enterprises Suitable for large enterprises
4 Economy It is highly economical It is moderately economical It is not economical
5 Degree of specialization Specialization is low Specialization is medium. Specialisation is high.
7) Difference between Line Organisation and Staff Organisation.
S. NO. Points of Difference Line organization Function Organisation
1 Nature of authority Authority is centralized at the top Authority is decentralized among different bosses
2 Unity of Command Unity of command is strictly followed Unity of command is not followed
3. Classification Line organization has two types pure and departmental Functional organization has no types.
4. Nature of responsibility Clearly established Responsibility is distributed.
5 Discipline Rigid discipline Liberal discipline
6 Nature of Management Simple method of management Complex method of management
8) Differences between Formal and Informal Organisation.
S.No Basis Formal Organisation Informal Organisation
1 Formation It is the result of company’s rules, policies and regulation It is the result of working together
2 Purpose It achieves pre-determined purpose It has no pre-determined purpose
3 Authority and Responsibility It is well thought, predetermined and made known to individuals It is spontaneously and automatically developed. It is unpredictable
4 Degree of rigidity It is more rigid. It is more flexible
5 Leadership Managers are leaders Leaders are voluntarily chosen
6 Flow of authority Authority flows vertically Flow of authority is horizontal
7 Goal It intends to achieve organisational goals It provides social satisfaction to people.
9) Distinguish between delegation of authority and decentralization of authority.
S. No. Basis Delegation of Authority Decentralisation of Authority
1) Concept It is a process of granting authority to a subordinate to get a particular work done. It is the end result of delegation of authority and the creation of and disposal of authority responsibility as between a manager and his subordinate.
2) No. of Persons involved It is confined to a manager and his immediate subordinate in a work unit. It involves all managers at all levels. It indicates relationship between top management and various other department and sub departments in the organization
3) Objective To reduce the burden of the manager To prepare the organizational head of the unit for handling major expansion of its activities.
4) Purpose The purpose of delegation is the multiplication of the manager. Purpose of Decentralisation is to increase subordinates’ role in the Organisation and achieve the objective of the business.
5) Stability The authority delegated can be easily withdrawn The decentralisation cannot be easily withdrawn
10) Distinguish between ‘recruitment’ and ‘selection’
S. No. Basis Recruitment Selection
1. Meaning Recruitment is an activity of establishing contact between employer and applicants. Selection of employees is the process of picking up more competent and suitable candidates for the job.
2. Objectives. Encourage large number of candidates to apply for the job. Selection aims to rejecting unsuitable candidates, so far the most competent candidate is available at every stage.
3. Stages Identifying the suitable candidate and motivate them to apply for the various jobs in the organisation. In selection more stages involved such as, Application blank, Selection test, Interview, Medical tests ,References etc
4. Time It is less time consuming It is more time consuming
5. Process It is a positive process It is a negative process
6. Economy Recruitment enjoys economy of time. Selection is expensive.
11) Difference between Internal and External Sources of Recruitment
S. No. Basis Internal Sources External Sources
1. Meaning It is the process of recruiting employees from within enterprise It is the process of recruiting employees from outside the enterprise.
2. Basis Generally based upon seniority of employees Normally based upon the merit of the employees.
3. Time Involved It is less time consuming It is more time consuming
4. Economy Internal sources of recruitment enjoy economy of time. External sources of recruitment are expensive.
5. Quality of Recruitment Quality of recruitment is not superior Quality of recruitment is superior
12) Difference between Training and Development
S. No. Basis Training Development
1. Meaning Training is an activity to increase understanding, skill and attitude to perform specific jobs in better ways. Development means the growth of employees at every level of management by a planned and organized process.
2. Aim The aim of training is to improve the skill of the employee in performing the job. The best possible utilization of employees’ capability is its main aim.
3. Scope Training is the part of development and also limited in its scope. Development is a wider term it includes education learning and training.
4. Duration Training is imparted for a fixed period Development is a continuing process and a never-ending process.
13) Difference between Time Rate and Piece Rate Wage System
S. No. Basis Time Rate Piece Rate
1. Basis Wages are determined on the basis of time Wages are determined on the basis of number of units produced.
2. Efficiency Wages are not linked with the efficiency of the workers Wages are directly linked with the efficiency of the workers.
3. Quality Quality of work tends to be high. Quality of work tends to be low
4. Wastage There is less chance of wastage of materials There is more chances of wastage of materials
5. Supervision Close supervision is required. Close supervision is not required.
6. Cost Cost of maintenance is low. Cost of maintenance is high.
7. Attitudes of Trade Union Trade Unions prefer it. Trade Unions Oppose it.
8. Security Provides sense of security to employees as the wages are assured. There is a feeling of economic insecurity since wages depend on the output.
14) Difference between Management and Leadership
S. No. Basis Management Leadership
1. Scope Management has wider scope. It plans, organises, directs and leads the business activities Leadership is a part of management
2. Authority Management directs the employees through the formal authority Leader exercises his leadership through informal activities.
3. Relationship There is authority responsibility relationship between the manager and the subordinates. There is relationship between the leader and the follower
4. Stability Management is generally stable Leadership is never stable.
5. Importance Management is necessary in every enterprise. Leadership is not essential
6. Structure Management has formal structure Leadership may be both formal and informal.
15) Difference between Direction and Supervision
S. No. Basis Direction Supervision
1. Scope The Scope of direction is wide, It includes supervision, motivation, communication &leadership Supervision is a part of direction hence its scope is limited
2. Level of Management Direction is generally at top level Supervision is the job of the lower level management
3. Framing policies Direction being at the top level formulates policies and takes important decisions. Supervision being a lower level management function it is involved in the execution of the policy
4. Incentives Direction makes the provision of financial and non-financial incentives. Supervision cannot provide incentives but can recommend the employees for reward.
16) Difference between Formal and Informal Communication.
S. No. Points of difference Formal Communication Informal Communications
1. Verbal and written It is written communication. It is verbal communication.
2. Direct/Indirect It is based upon indirect written documents It is based upon direct gestures.
3. Scalar Chain It follows the chain of command It does not follow the chain of command.
4. Proof A proof of sending formal communication is kept. There is no proof for sending it.
5. Authenticity Messages are authentic. Message may not be authentic.
6. Speed It is not as fast as informal communication. It is faster in speed
17) Difference between Oral and written Communication.
S. No. Points of difference Oral Communication Written communication
1. Form Messages are verbally transmitted Messages are transmitted in writing
2. Time Taken Messages can be exchanged very quickly Exchange of messages takes lot of time.
3. Expenses It is economical It is expensive
4. Responsibility Responsibility cannot be fixed. Responsibility can be fixed.
5. Language Language problem is not very serious Language problem is very serious
18) Difference between under-capitalisation and Overcapitalisation
S. No. Points of difference Capitalisation Capital structure
1. Meaning Capitalisation in a narrow sense is the sum total of capital raised through shares, debentures & earnings. Capital structure is the make up of capitalisation. i.e., shares, debentures, bonds & loans etc.
2. Classification. Capitalisation is classified as over capitalisation and under capitalisation Capital structure may be high geared and low geared.
3. Influence Capitalisation is mainly influenced by the internal requirements of the enterprise Capital structure is mainly influenced by the external forces, such as market conditions, investors., etc.
4. Type of funds Capitalisation represents quantity of funds. Capital structure represents quality of funds.
19) Difference between Fixed Capital and Working Capital
S. No. Points of difference Fixed Capital Working Capital
1. Period Fixed Capital is required for longer period Working Capital is required for Short period
2. Uses Fixed capital is required for acquiring fixed assets It is required for buying current assets.
3. Utilization Capital is blocked and sunk in the business. It is not available for routine business activity. Capital is working and revolving so always available for routine business activities.
4. Source Raised through shares, debentures and loans. Raised through cash sales, collection from debtors, overdraft etc.
20) Difference between Capital Market and Money Market
S. No. Points of difference Capital market Money Market
1. Meaning The market dealing in the long and medium term is known as capital market. The market dealing in short term funds is known as money market.
2. Amount of fund The capital market arranges large amount of funds. The money market arranges small amounts of funds.
3. Use of Funds The capital market makes fund available for investment in fixed assets. The money market makes fund available for routine expenses or working capital.
4. Periods Funds may be used for 7 to 25 years on long-term basis. And 1 to 6 years on medium term basis. The use of funds is restricted to 1 year.
5. Scope It has limited scope. It has widely distributed market.
6. Rate of interest Rate of interest in this market is generally low. Rate of interest in this market is generally high.
7. Instruments examples Shares, debentures, bonds etc. Commercial bills discounting, treasury bills, commercial papers etc.
21) Distinction between Investor and Speculator
S. No. Points of difference Investor Speculator
1. Meaning An investor is a person who buys the securities A speculator is person who enters into contract for buying and selling the securities, however does not actually buy or sell the securities.
2. Objective An investor is interested in regularity of income and safety of funds and appreciation in the value of investments A speculator is interested in making quick profit by changing price.
3. Delivery of securities The securities are delivered by the sellers to the purchasers Delivery of securities does not take place.
4. Payment Immediate payment is made for the securities Payment is not made immediately and the difference is made on the settlement date.
22) Difference between Under Capitalisation and Over Capitalisation
S. No. Points of difference Under capitalisation Over capitalisation
1. Meaning Under capitalisation is a situation, wherein the company has insufficient capital but large amount of secret reserve Over capitalisation is that phenomenon of a business enterprise, wherein long-term funds, (share capital, debenture and loans) exceed the amount of optimum capitalisation
2. Earnings Higher rate of earnings Lower rate of earnings
3. Credit worthiness Higher rate of earning increases credit worthiness Lower rate of earnings due to lower rate of earnings
4. Competition Facilitates competition owing to high rate of dividend/ earnings. Discourages competition owing to lower earnings.
5. Goodwill Goodwill increases Goodwill or reputation is lost.
6. Income Regular Income is assured. Return is uncertain and irregular.
23) Difference between Primary and Secondary Market
S. No. Points of difference Primary market Secondary Market
1. Meaning It is a market wherein funds are raised through shares, debentures and bonds buy industrial enterprises. It is a market which creates liquidity. It facilitates transfer of ownership of securities. It makes purchases and sale of securities easy.
2. Issue Deals with the fresh issue of shares Deals with the shares already issued by the different companies
3. Objective Helps in raising funds for the company Helps in liquidity of shares for the investors
4. Origination Primary Market originates first Secondary market supports the primary market.
24) Distinction between Speculation and Gambling.
S. No. Points of difference Speculation Gambling
1. Study Speculative activities are based upon the careful study of the stock market. Gambling is based upon chance event. No intelligence is involved in gambling.
2. Legality Speculation is legal Gambling is an unlawful, void and not enforceable in the court of law.
3. Benefits Speculation is beneficial to the economy. Gambling has no benefits to the economy. It is anti-social.
25) Distinction between Broker and Jobber
S. No. Points of difference Broker Jobber
1. Dealings The broker does not deal in securities in his name. Jobber deals in his own name.
2. Remuneration The broker gets commission from both buyer and seller Jobber earns profit from his dealings
3. Medium The broker works through the medium of jobber. The jobber does not need the broker to deal.
4. Channel Broker is the channel between the investor and the jobber The jobber is a channel between the broker, Investor and Stock Exchange.
26) Distinction between marketing and selling:
S.No Basis Marketing Selling
1 Meaning Marketing means all customers’ wants satisfying efforts concerning with planning, pricing, promoting product and services Selling is the transfer of ownership and possession of the goods to the purchasers
2 Objective It refers to integrated approach towards achieving long-term goals. It refers to piece meal approach to achieve short-term goal.
3 Emphasis Emphasis is on the customers’ satisfaction Emphasis is on the selling of the product
4 Beginning Marketing begins with consumers determines the needs of the consumer first than producer accordingly. Commodities are produced and after wards efforts are made for their profitable selling.
5 Stage Marketing is in its initial stage, what customers wants, and produces such goods that would satisfy the consumers’ wants. Or in other words marketing starts with the consumer and ends with the consumer Selling starts after the production of the goods and efforts are made for their profitable sale.
27) Distinction between Advertising and Sales Promotion
S.No Basis Advertising Sales Promotion
1 Meaning Advertising is an effort to create & sustain the demand of the product. Sales promotion is an effort to stimulate consumer to purchase more and more of a commodity.
2 Influence Advertising influences consumer. Sales promotion is an attempt to influence channel of distribution.
3 Mailing Advertising literature is directly mailed to the consumer Sales Promotion literature is generally mailed through middlemen, dealers, retailers, etc.
4 Orientation Advertising is consumer oriented activity Sales promotion is product-oriented activity.
28) Distinction between Advertisement and Personal selling:
S.No Basis Advertisement Personal Selling
1 Coverage Advertisement covers vast area Personal Selling is restricted to specific customer.
2 Cost Advertisement is less costly Personal Selling is more costly.
3 Media Advertisement establishes impersonal contact. Salesmanship is the media of personal contact.
4 Variation Advertising media can vary from time to time. There are not much variations in case of Personal Selling.
5 Contact Advertising is the method of mass influencing Personal Selling is the media of individual contacts.
6 Sale Advertising does not result in immediate sale Personal Selling results in immediate sale
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