Business Organisations

Question 1

Micro vs. Macroeconomics

Answer 1

Economics is the allocation of scare resources.
Micro = company level
Macro = gov impact on economy

Question 2

Sole Traver vs. Organisation

Answer 2

Sole trader = single person doing everything

Org = group of people organised and managed in a way that aims to follow a corp goal or need

Question 3

Organisation

Answer 3

Has goals;
Structure; and
Systems & procedures.

Org exists independently of any one member

Facilitates sharing of ideas, experience, knowledge, skills and resources

Question 4

Private Sector Orgs

Answer 4

Profit seeking:

• Unincorporated: sole traders & partnerships
• Incorporated: Ltds & Plcs

Not for Profit:
- Charities, clubs, unions

Question 5

Public Sector Orgs

Answer 5

Two types:

State owned industry and Government office

Question 6

Private vs. Public Sector

Answer 6

Plcs & Ltds

Private: owned by investors, responsible to shareholders, can be for or not for profit

Public: owned by the state, responsible to the gov, generally not for profit

Question 7

Non Governmental Organisation (NGO)

Answer 7

Private sector org not run for profit, but for other goals (another name for private not for profits)

Question 8

Profit Seeking Organisations

Answer 8

Primary objective is to maximise returns for shareholders

Question 9

Unincorporated Organisations

Answer 9

The business and the owner are the same legal identity.
Owner has unlimited liability.
Will be a sole trader or a partnership.

Question 10

Incorporated Organisations

Answer 10

Business is a separate legal identity to the owners.
Owners have limited liability.
Will be private (Ltd) or public (Plc)

Question 11

Public Limited Companies (Plc)

Answer 11

Shares can be issued to the public & traded on stock exchange
Owner can lose control selling to public
Large number of shareholders
Additional regulations
Tend to be large businesses

Question 12

Private Limited Companies (Ltd)

Answer 12

Can’t issue shares to the public
Owners retain high control
Small number of shareholders
Tend to be smaller companies

Question 13

Co-operatives

Answer 13

Owned and controlled by members (not shareholders).

Goal is the welfare of the members which could be customers or staff.

Question 14

Mutual Organisations

Answer 14

Owned and controlled by members. Members tend to be customers and the products are usually financial e.g a mutual building society.