1.2 tYPES OF ORGANIZATIONS

Question 1

Public vs Private sector

Answer 1

Public sector:
Controlled by state or government

Private sector:
the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government.

Question 2

Free market or command economy

Answer 2

Free market Economy:
A free market is one where voluntary exchange and the laws of supply and demand provide the sole basis for the economic system, without government intervention.

Command economy:
one in which a central government makes all economic decisions.

Question 3

Organizations
For profit - commercial
non profit
other organizations and partnerships

Answer 3

For profit:
Sole trades 
partnerships 
Corporations 
‘

Non profit:
NGOs
Charities

Other 
social enterprise
cooperatives
micro finance providers 
public private partnerships

Question 4

FOR PROFIT

sole trader, partnerships, companies/corporations

Answer 4

Sole traders - own and run business on their own, easy to set up, only their decisions. BUT personally responsible for any loss - if unable to pay debts or credits then able to seize owners personal possessions
unlimited liability

Partnerships - a business span between two or more individuals up to 20 people.
More ideas and expertise, more income, cost savings, new perspectives. BUT all partners personal assets could be seized. emotional issues - less control. lacks of stability
Unlimited liability

Corporations - large organizations owned by many individuals and or groups known as shareholders (each own a share of business) - incorporated businesses become legal entities separate from shareholders. - LIMITED LIABILITY

Private limited companies - LTD
owned by smaller number of people mostly families

LTD’s can go public by selling shares to the public to become a public limited company
PLC’s have greater access to capital because anyone can invest - however PLC must share financial accounts

Question 5

Non profit organizations

NGOs and Charities

Answer 5

most non for profit are created to carry out a particular purpose or mission

two main non for profit organizations are NGOs and Charities

Question 6

NGO and Charities

Answer 6

NGOs: independent from the government and aimed to changed the world
they have limited liability
adv: legal protection, operational flexibility, country development
disav: difficult to attain loans, board members

Charities:
to provide help and raise money for those in need
they have limited liability
Adv: no income or corporation tax, raise funds from public
Disav: trustees aren’t allowed to receive financial benefits, lots of competition