Chapter 1 Flashcards
Organisations are distinguished by many factors, including?
- Who owns them
-Objectives are
What is a sector? Example?
who they are owned by
1) Public Sector
2) Private Sector
What is an objective? Examples?
-There are two main categories of ‘objectives of organisations
1) Profit
2) Non Profit
What does the Public Sector refer to?
The public sector refers to organisations that are involved in provision of goods and sevices by and for the government at a national, regional or local level.
What are examples of common public sector areas?
Common areas where traditionally public sector services have operated include hospitals, schools, defence and police
Can ‘sectors’ and ‘categories’ overlap?
Yes, you may find both non profit and for profit enterprises in both the public and private sectors.
Which sector would publicly owned corporations fall into?
Publically owned corporations (State owned enterprises) would fall into the public sector/public organisations
e.g. BT used to be a State owned organisation that was taken into private ownership in the 1980’s (privitisation)
What is the principle goal of a public organisation?
To provide services which are deemed important by society
How are public organisations funded?
Through taxation revenues
Since public organisations are funded by the public through taxation revenues, it is important that……
1)Resources - demonstrate their efficiency in the allocation and use of their resources.
2) Services - maximising the quality and quantity of the services provied,
3) Finance - balancing the financial budget - financial stability
What are the recent developments within the public sector
-A shift to privatisation of previously State-run organisations
-Public-private partnerships
What is a public-private partnership?
-Where the government joins forces with the private sector
-Motive: share risks and rewards
-Rationale: by bringing in private sector expertise, the public services can be made to run more efficiently with better allocation of resources
-E.g.: Common with major construction projects
What are the two most common examples of organisations that benefit society but aren’t necessarily owned by gov or funded by public money (tax)?
Private non-profit
-Mutuals
-Co-operatives
What is a mutual?
-Raising funds from its members
-Used to provide common services to all members
-owned by and run for the benefit of its members
-no external shareholders to pay in the form of dividends.
What is an example of a mutual?
Nationwide Building Society is a well-known example.
What is a cooperative?
-a cooperative returns any margins or profits to members on the basis of usage.
-A member-owned business with membership open to those who use its services.
What is the difference between a mutual and a cooperative?
-The principal distinction lies in their basic operating principles.
Co-op = “to each according to use”
mutual = “ to each according to need”.
The goal of a mutual is to create a fund that all members can fall back on in times of need.
In contrast, members of a co-op want to use the services the co-op offers as often as possible in order to get the maximum benefit of being a co-op member.
What is a broad definition of both mutuals and cooperatives?
- An independant association of individuals who have voluntarily come together in order to fulfil their common needs and aspirations
- through co-ownership in a democratically run organisation
A non profit does not have WHAT as its primary objecticve?
Profit
What is the primary objective or a mutual?
try to make a surplus
used to meet the needs of their members.
This is commonly done by providing better rates of interest offered on borrowings and deposits.
What is the primary objective of a charity?
Charities goals are to provide a service to the whole of society or some specific target group within society
What is the primary objective of a members club?
-To provide the members within a facility an appropriate environment within which to enjoy their membership
e.g. a sports club
What is a QUANGO?
Non-departmental public bodies that perform a range of tasks/functions on behalf of the government.
What does QUANGO stand for?
Quasi Autonomous Non-Governmental Organisations
What is the general goal of a non-profit organisation?
To provide value for money. This is often measured by the 3 E’s.
What are the 3 Es?
-Economy (cheap acquisition of resources)(of appropriate quality)
-Efficiency (minimum wastage of resources)
-Effectiveness (operating in line with organisations objectives)
What is a surplus?
more income than expenditure
What is a Private sector organisation
Organisations that are not owned by the state
What are the main types of private organisations?
The green network pic here
What is the difference between private and public limited companies
Private (Ltd) shares are not sold on the stock market
Public (plc) are sold on the stock market
What are the key features of profit making organisations?
-They make up the largest proportion of organizations in the UK.
-They provide the most employment opportunities
-They generate significant tax revenues for the government
What is a sole trader?
Where one individual owns and runs the entire company.
Minimal admin and paperwork.
HOWEVER - owners have unlimited liability
What is unlimited liability?
When personal assets of a business owner could be seized in order to pay the debts of the business
Applicable for sole traders and partnerships
What is a partnership?
-a formal arrangement by two or more parties
-to manage and operate a business and share its profits
-Owners have unlimited liability
-Minimal admin/red tape/paperwork
What is a partnership agreement?
-sets out their relationship in a legally binding way
-Within a partnership, there are no shares issued.
What is a limited company?
A company that is a seperate legal entity from its owners