Disadvantages Of Cooperative Organization

Business , Education
Some of the notable drawbacks or disadvantages of cooperative organization are highlighted below:

1. Lack Of Privacy

In cooperative organization, all business activities are performed openly. Members of the society can easily get information about the business affairs. So, it lacks secrecy and privacy.

2. Limited Resources

Generally, cooperatives are established and operated by lower and middle income group people. The cannot invest adequate capital to undertake large scale business.

3. Possibility Of Disputes And Conflict

Because of open membership, people of different background (religion and ethnic group) and status may be the member of cooperatives. So, there is a possibility of disputes and conflict among the members of cooperative organization.
disadvantages of cooperative organizations
4. Slow Decision Making Process

All the members are involved in the decision making process of cooperatives. Decisions are taken after long discussion and consultation with the members. So, decision making process takes a long time.

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5. No Prompt Action

Because of slow decision making process, prompt action is not possible in this type of business organization.

6. No Credit Facility

In cooperatives, all the transactions are performed on cash basis. So, there is no credit facility to the members.
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Advantages Of Cooperative Organization

Business , Education
Main advantages or benefits of cooperative organization can be studied as follows:

1. Easy To Establish

Cooperatives can be easily established when compared to joint stock company. It requires ten members, simple registration process and few legal formalities to form cooperative organization.

2. Limited liability

Members are not personally liable for the debt and loss of the organization. Their liability is limited to the extent of their share contributed. So, members' personal property will not be used to pay the debt of the cooperative society.

3. Open Membership

Cooperatives are voluntary organizations where any person can become a member or leave the organization without any barrier. There is no discrimination among the members of the society.

4. Democratic

Cooperatives are operated in democratic management style. All the members have voting right and there is no restriction to express opinions and to give suggestions. 


5. Perpetual Life

Cooperative organizations are long-lasting and stable form of organization like a joint stock company. Single or few members cannot dissolve the organization as per their wish. Bankruptcy, death or insolvency of any member does not affect the continuity of the business.
advantages cooperative organization
6. Government Assistant

Cooperatives are fully supported by the government of the country. Government provides financial support and protection to this type of organization.

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7. Tax Benefit

Cooperative societies enjoy tax benefit because of tax concession and exemptions provided by the government.

8. Social Welfare

Cooperative societies are established with the aim to provide quality goods at low price to the members at low price. So, there is very low profit margin in this type of business. The profit of the society is used for social welfare.

9. Elimination Of Intermediaries 

Middlemen or business intermediaries are totally eliminated because products are supplied directly from producers to final customers.
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Disadvantages Of Joint Stock Company

Business , Marketing
Main disadvantages or demerits of joint stock company can be expressed as follows:

1. Difficult To Form

It is a complicated process to form and operate joint stock company. Lots of legal formalities, high set-up costs and much time is needed to establish this type of business.

2. Lack of Quick Decision

In joint stick company salaried manager cannot make any decision. Important decisions are taken after the approval of board of directors. Therefore, decision making process is lengthy and prompt action is not possible. 

3. No Secrecy

In joint stock company, it is not possible to maintain business secrecy and privacy like sole proprietorship and partnership firms.All the financial data and information become public through financial statements and all the matters are discussed in annual general meeting with the shareholders and other parties.

Ownership and management are different in joint stock company. All the organizational activities are performed by salaried managers. A company do not provide extra incentive for their work which may lack motivation and personal interest for the growth of the business.

5. High Tax

Joint stock company suffers from higher tax rate than sole trading concern and partnership firm. It has to pay more tax than other types of business.
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Advantages Of Joint Stock Company

Business , Marketing
Merits or advantages of joint stock company can be studied as follows:

1. Limited Liability

In joint stock company shareholders' liability is limited to the amount of share they invest in the business. So,  their personal property will not be used to pay the debt and other liabilities of the business in case of loss.

2. Perpetual Existence

Joint stock company is stable and long lasting form of business (as compared to sole proprietorship and partnership firm). The death, lunacy, or insolvency of the shareholder does not affect the existence of the company.

3. Easy Transfer of Share

A shareholder of joint stock company can easily sell or transfer the right of share to any one without any restriction. 
advantages joint stock company
4. Large Capital

It can raise large amount of capital by issuing equity share and by taking long-term loan from banks and other financial institutions. So, the company does not suffer from the limitations of inadequate capital.


5. Scope Of Expansion

Because of huge capital resources and better management, large scale production is possible. So there is a scope of future growth and expansion.

6. Efficient Management

Joint stock company is run by experienced, skilled and talented professionals. It helps to increase the efficiency of management.

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7. Economic Development

A joint stock company collects and mobilizes scattered savings, promotes industrialization, and creates employment opportunities in the society. So, it plays significant role in the economic development of the country.

8. Flexibility

A company has the ability to cope with both internal and external business environment. Changes or modification in working pattern can be made as per the situation. So, joint stock company is a flexible type of business organization. 
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Disadvantages Of Partnership Firm

Business , Marketing
Main drawbacks or disadvantages of partnership firm can be highlighted as follows:

1. Uncertain Future

The future of partnership firm is always uncertain. It may be shut down in case of lunacy or death of a partner.So, there is instability in this form of business.

2. Unlimited Liability

All the partners are liable for the losses of business. They have to sell their personal property in order to pay debts and other liabilities of the business.
disadvantages partnership firm
3. Disagreement

There is a chance of disagreement between partners in partnership business. Misunderstanding and mistrust may create dispute among the partners.

4. No Prompt Decision And Action

In partnership firm, there should be interaction, consultation and approval of all partners to make a decision. It delays decision making process. Prompt action is not possible because of delayed decision.

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5. Limited Capital

Partnership firms have more capital than sole proprietorship business but they have very limited amount of capital while comparing to joint stock companies and multinational companies.

6. No Public Faith

Partnership firm lacks legal status because no legal procedures are followed to start the business. It will be hard for the public to believe such business. So, it lacks public faith.
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Advantages Of Partnership Firm

Business , Marketing
Advantages or merits of partnership firm partnership firm can be highlighted as follows:

1. Easy To Commence

Partnership firm can be established and operated easily. It does not require legal process and formalities to start partnership business. Registration is not compulsory.

2. Low Set-up Cost

It can be commenced with low set-up costs. It does not require large capital to operate partnership firm. Partners may increase capital to expand their business as per the requirement.

3. High Borrowing Capacity

In partnership firm, large amount of capital can be raised because there are more partners to provide fund. Banks and other financial institution also provide loans easily to the partnership firms as compared to sole trading concern. 

4. Better Management

Better management is possible because of the sense of ownership, combined talent and coordination among the partners.

         Also Read: 

5. Division Of Risk

In partnership firm, all the business losses are borne by all partners as per the partnership deed. Debts and other liabilities are not borne by a single partner like in sole proprietorship.


6. Privacy

It is not compulsory to publish financial statements of partnership firm. So, it helps to maintain privacy and secrecy of the business.
advantages partnership firm
7. Flexibility

The size and working pattern of the business can be modified or changed as per the need and the environment. So, it is a flexible form of business organization.

8. Equal Rights

It ensures equal rights to all the partners. They have equal right to express their feelings, opinions and to take part in decision making process of the firm.

9. Easy To Wind Up

It can be dissolved or wind up easily at any time by making agreement between the partners. It does not require legal formalities to shut down the business.
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Disadvantages Of Sole Proprietorship

Business , Marketing
Main drawbacks or disadvantages of sole proprietorship / sole trading concern can be expressed as follows:

1. Limited Amount Of Capital

In sole proprietorship, it is difficult to raise capital to fund in business. So, future expansion and large scale production is not possible due to the lack of adequate capital.

2. Personal Liability

Sole trader is solely liable for the debts and liabilities of the business because there is no separate legal entity between the owner and the business. So, proprietor's assets are always at risk.

3. Uncertainty

Life of sole trading concern is uncertain and limited. Business will end in case of death or disability of trader.
disadvantages sole proprietorship
4. Lacks Division Of Labor

Due to small size and limited area of operation sole proprietorship lacks division of labor both in operating level and managerial level.
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5. Unsuitable For Large Scale Operation

Sole trading concern suffers from inadequate capital and limited managerial skills. So, it is not suitable for large scale operation.  
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Advantages Of Sole Proprietorship

Business , Marketing
Main advantages or benefits of sole proprietorship or sole trading concern can be expressed as follows: 

1. Easy To Commence

Formation and operation of sole proprietorship is simple and quick process. Sole trader can establish and run business at any time because it does not require complex registration process and legal formalities.

2. Easy To Wind Up

Sole proprietorship can be easily dissolved at any time if the proprietor wants to wind up the business. 

3. Profit Retention

Sole trader does not need to share profit with others. He/she can retain total profit solely. 

4. Maximum Privacy

Owner of sole proprietorship can maintain high level of privacy because he does not share business secrets and data with other parties. 
advantages sole proprietorship
5. Easy To Manage And Control

Sole trading concern can be easily managed and controlled because it is small form of business organization.


6. Quick Decision

The sole trader can take decision without consulting others. So, there is no delay in decision making.

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7. Prompt Action

Quick decision helps to take prompt action. It ensures smooth operation of business without delay.

8. Low Start-up Costs

Sole trading concern can be established with small amount of capital. The owner can expand business by increasing the capital.

9. Flexibility

Flexibility is another benefit of sole proprietorship. Changes can be made according to the requirement. Business structure and working pattern can be modified or changed as per the environment.
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Disadvantages Of Mail Order Business

Business , IT
Demerits Of Mail Order Business

Some of the notable drawbacks or disadvantages of mail order business can be highlighted as follows:

1. No Personal Contact

Mail order business lacks personal contact between buyer and seller. So, customers cannot get proper instruction and advice before purchasing the good.

2. Not Suitable For All Products

Mail order business is not suitable products that require demonstration. It is also unsuitable for those products which requires after sales services.

3. No Credit Facility

It does not provide credit facility the the customers. So, customers may not be attracted in this business.

       Also Read: 

4. Suitability

Mail order business is not suitable for illiterate customers.
disadvantages mail order business
5. Risky

There is a high chance of fraud in mail order business. Sellers may provide low quality products at high price. So, it is risky to buy through mail.

6. High Price

Price of the products high because of high advertising costs and mailing costs. 
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Advantages Of Mail Order Business

Business , IT
Merits Of Mail Order Business

The main advantages or benefits of mail order business can be expressed as follows:

1. Less Capital Requirement

It requires less startup costs to operate mail order business. It can be establish and operated with less amount of capital. Therefore, less capital requirement is one of the main advantage of mail order business.

2. Benefits Of Large Scale Buying

Mail order business can enjoy the benefit of large scale purchasing. Products are purchased in large scale directly from producers. So, price of the products are lower because of bulk buying.

3. No Middlemen

Mail order business completely eliminates business intermediaries and middlemen as products are sold through mail.
advantages mail order business

4. Wider Market

Mail order business has wider market than other forms of retailing institutions. It can be operated nationally and internationally because there is no limit to the market range. 

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5. No Bad Debts

Products are sold on cash basis only. So, there is no risk of bad debts in mail order business. 

6. Home Delivery Service

Mail order business provides home delivery service to the customers. Customers do not need to visit different shops to select products. It saves their valuable time. So, mail order business creates convenience in shopping. 
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Disadvantages Of Multiple Shops

Business , Marketing
Major drawbacks or disadvantages of multiple shops/chain stores can be studied as follows:

1. Large Capital Requirement

It requires large amount of capital to operate multiple shops. So, the producers and entrepreneurs with less capital cannot establish and run such stores.

2. Limited Choice

This is another main drawback of chain stores or multiple shops. These shops offer limited line of products to their customers due to the absence of varieties. 

3. High Operational Costs

Administrative and supervision costs are very high in this type of stores.

                    disadvantages multiple shops
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4. Poor Customer Service

Chain stores do not provide home delivery service, after sale services and credit facility to the customers. There is also no selection facility to the buyers. It negatively effects the image and goodwill of the business.

5. Lack Of Efficient Employees

It is difficult to find efficient and qualified staffs to run multiple shops. Delegation of authority and responsibility is another complex task for the central office.
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Advantages Of Multiple Shops

Business , Marketing
Main advantages of multiple shops or chain stores can be described as follows:

1. Elimination Of Intermediaries

Multiple shops eliminate middlemen and business intermediaries as they are owned and operated by manufacturers/producers.

2. Economy In Buying

Multiple shops enjoy the benefit of bulk buying and mass production. These stores buy large quantity of materials or products at very low cost.

3. Fix Price

There is uniformity in selling price at all the branches and centers. Fixed price helps to build image and goodwill of the store.
advantages multiple shops
4. Low Price

Because of low operation costs, elimination of middlemen and large scale purchasing, these stores can offer quality goods at low price.

5. No Bad Debts

Products are sold on cash basis in multiple shops or chain stores. So, there is no risk of bad debts and outstanding.

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6. Diffusion Of Risk

In multiple shops, the total risk can be divided as the loss of one shop can be covered from the profit of another shop. 

7. Easy To Identify

Customers can easily identify these stores because of uniform decoration and display.

8. Economy In Advertising

Common advertisement for all stores makes economy in advertising. 
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Disadvantages Of Supermarket

Business , Marketing
Major disadvantages or drawbacks of supermarket can be highlighted as follows:

1. Huge Financial Resources Required

It requires huge amount of financial resources to establish and run supermarket. So, it is difficult for small investors and entrepreneurs to start this business.

2. Distance

Supermarkets are located in the busy and overcrowded areas. They are faraway from villages and residential areas. So, suburban people are not benefited from these stores.

3. No Personal Attention

Because of freedom of selection and self-service, employees do not care about the customers. So, it lacks personal attention.
disadvantages of supermarket
4. No Customer Service

 Different services like home delivery service, installation service, after sales service, credit facility etc.  are not provided by supermarket.

5. Not Suitable For All Products

Supermarket is not suitable for the products which require the service and guidance of sellers and experts.
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6. Problems Of Mismanagement

Supermarkets may suffer from mismanagement because of poor communication and coordination among different sections and departments.
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Advantages Of Supermarket

Business , Marketing
Main benefits or advantages of supermarkets can be expressed as follows:

1. Reasonable Price

Supermarkets can provide branded and quality products at low and reasonable price because of larger sales volume and low profit margin.

2. Large Turnover

Generally, supermarkets are situated in the busy and crowd area where more customers can be attracted. Large turnover is possible because of low price and freedom of selection.

3. Low Operation Cost

Supermarkets are operated with the help of few staffs. They do not provide after sales services to the customers. So, it needs low operation expenses as compared to departmental stores.
advantages of supermarket
4. High Profit

Supermarkets can earn high profit because of large turnover and less operation and selling expenses.

5. Shopping Convenience 

Supermarket ensures easy and quick shopping by offering varieties of products at the same place. Customers can buy all the required products without visiting different shops.

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6. No Bad Debts

Supermarkets eliminate the risk of bad debt because of cash basis transaction.

7. No Bargaining

Supermarkets eliminates problem of bargaining because all the products are sold on reasonable and fixed price. 
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Advantages And Disadvantages Of Departmental Stores

Business , Marketing
Departmental stores are retailing institutions offering varieties of goods under one roof. There are several advantages of this type of stores such as large variety of products, proper customer service, benefits of bulk buying etc. and some drawbacks such as requirement of large investment, high price, no personal touch etc. This post points out some of the major advantages and disadvantages of departmental stores.

Advantages Or Benefits Of Departmental Stores

The main advantages of departmental stores can be highlighted as follows:

1. Shopping Convenience

Departmental stores offer large variety of consumer products at the same place. So, it facilitates the consumers to purchase all the goods they needed without moving from one shop to another.

2. Central Location

These stores are established and operated in the central location of city or town. It helps to attract more customers than other ordinary stores.

3. Wide Selection

Departments stores offer large variety of items of different, companies, brands, style, taste, design, quality etc. So, the customers can get better selection opportunity.

4. Benefits Of Bulk Buying

Because of adequate capital departmental stores can purchase goods in large quantity directly from producers. It reduces per unit price of the product and helps to maximize profit.
advantages disadvantages departmental stores
5. Customer Service

Departmental stores provide free delivery service, repair and maintenance service, credit facility, after sales service, telephone orders etc. to the customers. It increases customer satisfaction.

6. Efficiency

Departmental stores employ skilled, experienced, and trained manpower. It helps to increase operational efficiency of the business.


Disadvantages Or Drawbacks Of Departmental Stores

Some notable disadvantages of departmental stores are as follows:

1. Large Investment

It requires huge amount of capital to establish and operate departmental store. So, it is difficult for small investors to run such stores.

2. Distance

Departmental stores are situated in the center of the city or town. So, suburban people cannot avail the service of such stores.

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3. High Operational Expenses

It requires high operating costs to run departmental stores smoothly. Large sum of money is needed for staff salary, rent, decoration, advertisement, customer service etc. 

4. High Price

Customers have to pay high price of goods in departmental stores than ordinary retail shops because of huge capital investment and high costs of operation.

5. No Personal Touch

It is difficult to make personal contact with customers because departmental stores are too large and sales are made by salesman not by the owner. There is a lack of individual attention to the consumers.
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Advantages And Disadvantages Of Air Transport

Business , General
Air transport is the most safe, quick and comfortable system of carrying people and materials from one place to another. Main advantages and disadvantages of air transport can be described as follows:

Advantages Or Benefits Of Air Transport

1. Highest Speed

It is fastest among all the means of transportation (i.e. road, water and railway transport). So, people and goods can be transported more quickly in less time.

2. Suitability

Air transport is suitable to carry perishable goods (such as fruits, vegetables, fish etc), valuable goods, medicines and emergency items.

3. No Barriers

Air transport can be operated without any physical barriers such as mountains, hills, forest, rivers etc.

4. Suitable For Long Distance

It is useful for long distance travel because it is convenience, comfortable and safe means of transport.


Disadvantages Or Drawbacks Of Air Transport

1. Costly Mode Of Transport

It is costlier than other forms of transport. It is beyond the reach of common people because of high fare. 

2. Risky

Air transport is very risky means of transport because of high chances of accidents.
advantages disadvantages air transportation
3. Limited Capacity

It is not suitable to carry bulky and cheaper materials because of its small carrying capacity.

4. Unreliable

Air transport is highly affected by climatic condition. So, there is no regularity and certainty in this means of transport.

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5. Huge Investment

It requires large amount of capital for construction, maintenance and operation of air transportation.
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Advantages And Disadvantages Of Water Transport

Business , General
Water transport is an oldest means of carrying men and materials through sea, lake, rivers and canals. Main advantages and disadvantages of water transportation can be described as follows:

Merits Or Advantages Or Benefits Of Water Transport

1. Low Cost

Water transportation is cheaper than other means of transport (i.e. road, rail and air transport). It does not require infrastructure development costs and can be operated with low running cost.

2. Ideal For Heavy And Bulky Products

It is suitable to transport bulky goods and heavy cargo because of its largest carrying capacity.

3. Flexibility

It is more flexible than road and rail transport because it can be easily adjusted according to the requirements.
advantages disadvantages water transportation
4. Safety

Water Transport is safer than other forms of transport because of lower rate of accidents and breakdowns. 

5. No Disruption

There is very less chance of delay in water transport because of less traffic congestion.


Demerits/Disadvantages Or Drawbacks Of Water Transport

 Demerits or disadvantages of water transport can be highlighted as follows:

1. Slow Speed

Slow speed is the main drawback of water transport. It takes a long time to reach the destination.

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2. Unsuitable For Perishable Products

It is not suitable to carry perishable goods by this means of transport because of long lead time.

3. Uncertain

Water transport is highly affected by adverse weather condition. So, there is uncertainty and irregularity in this means of transport.

4. Not Suitable For Short Distance

AS it is the slowest means of transporting goods and people, therefore it is not suitable to carry small loads over short distance (in terms of cost and time).
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Advantages And Disadvantages Of Rail Transportation

Business , General
Railway is important and most widely used means of transportation to carry people and heavy materials. Main advantages and disadvantages of railway transport can be described as follows:

Merits Or Advantages Or Benefits Of Rail Transport

1. Safe And Reliable 

Rail transportation is least affected by adverse weather and there is lower chance of accidents and breakdown. So, it is safe and reliable mode of transport as compared to road transportation.

2. High Speed

Higher speed is another key benefit of railway transport. It ensures quick movement of passengers and goods because it is more faster than road and water transport.

3. Suitable For Bulky Items

Rail is suitable for transporting heavy and bulky items because of its large carrying capacity.

4. Cheaper Transport

Railway is economical than other forms of transportation. It is cheap and comfortable for carrying people and materials.
advantages disadvantages railway transport
5. Suitable For Long Distance

Railway transport is suitable for the movement of people and goods for long distance because of its cheapness and comfort. 

6. Regular Service

Railways follow strict time schedule and fixed route to provide transport facility. So, it provides regular service as compared to other means of transport.


Demerits/Disadvantages Or Drawbacks Of Railway Transport

1. Lacks Door To Door Service

Railway transport cannot provide door to door service because of fix routes and stations.

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2. Unsuitable For Short Distance

Railway is suitable for carrying heavy and bulky goods to the long distance. It is uneconomical to transport small loads over short distances.

3. Huge Investment

Railways need huge amount of investment because of high construction, operating, maintenance and overhead costs. 

4. Lack Of Flexibility

Rail transport has fixed routes,stations and strict schedule. So, it is less flexible than other means of transport.
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Advantages And Disadvantages Of Road Transportation

Business , General
Road transportation is most commonly used mean of transport for travelling and carrying people and goods from one place to another. Main advantages and disadvantages of road transport can be highlighted as follows:

Merits Or Advantages Or Benefits Of Road Transport

1. Small Investment

It requires less investment to operate road transportation. constructing the road needs low capital than laying the railway track. Automobiles (such as trucks, tempo, bus etc) can be purchased at low cost as compared to ships, trains and airplanes.

2. Door To Door Services

Water transport, railway transport and air transport cannot provide door to door service. It is possible only through road transportation. 

3. Flexibility

It is another notable advantage of road transportation. It is more flexible than other modes of transportation because there is no fix way and schedule and can be operated at any time through different routes.

4. Cheaper

It is a cheaper mean of transporting people and goods to short distance. 

5. Suitable For Perishable Goods

It is suitable for transporting perishable goods such as milk, fruits, vegetables, fish etc. safely from producers to final consumers.

6. Service In Rural Areas

It can provide transportation service in the rural areas where other forms of transport (rail, water and air transport) cannot be operated. 

Disadvantages Or Drawbacks Of Road Transportation

1. High Risk

Road transportation involves very high risk of accidents. So, it is not as safe as other modes of transportation.

2. Slow Speed

It is slower than other means of transportation.
advantages disadvantages road transport
3. Not Suitable For Long Distance

Road transportation is not appropriate for long distance travel because it is uncomfortable and costly.

     Also Read:

4, Not Suitable For Heavy Goods

It is not appropriate to carry bulky and heavy items through road transport.

5. Seasonal Nature

It is not reliable during rainy season because of flood and poor road conditions. 

6. Irregular

Road transportation lacks regularity because there is no fix route and schedule.
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Advantages And Disadvantages Of Group Incentives

Business , Education
Group incentives are reward (may be financial or non-financial) given to the group of employees for their collective effort to meet or exceed predetermined standard. Main advantages and disadvantages of group incentives can be expressed as follows:

Advantages Or Benefits Of Group Incentives

1. Suitable For Interdependent Jobs

Group incentive plan is very suitable when the job is interrelated and the output of individual cannot be measured separately.

2. Equal Share

This plan does not discriminate employees while distributing rewards. All employees get bonus or incentive equally in the same proportion. 

3. Promotes Group Work

It encourages the employees to work together for achieving the common goal. It leads to better performance and higher level of output. 

4. Encourages Team Spirit

Group incentives promotes cooperation and collaboration at the workplace. It helps to develop team spirit while doing the job. 

advantages disadvantages group incentives
5. Cost Reduction

It inspires employees for higher level of performance and increases willingness towards the job. It increases productivity and reduces production costs. 

6. Higher Satisfaction

It helps to increase employees' quality of work life and also increase job satisfaction.

    Also Read: 

Disadvantages Or Drawbacks Of Group Incentives

1.Chance Of Resentment

It gives emphasis on group work and ignores individual's effort. So, high performing employees may not be satisfied with this incentive plan and may lead to resentment. 

2. Chance Of Rejection

It distributes reward equally to all the employees which may not be accepted by hard-working and top-performing employees.

3. Self Deception

Group incentive may create the problem of self-deception among the employees.

4. Decrease Performance

Group Incentive focuses on team work which may lead to decrease in the performance of individual employee.
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