Chapter 1 Flashcards
Organisations and Stakeholders
What is an organisation?
An organisation is a social arrangement for the controlled performance of collective goals.
What is PPP?
Public-Private Partnership: Collaboration between public and private sectors.
What is PFI?
Private Finance Initiative: A way to create public-private partnerships by funding public infrastructure projects with private capital.
What are QUANGOs?
Quasi-Autonomous Non-Governmental Organisations: Semi-public administrative bodies outside the civil service but receiving financial support from the government.
In the Public Sector, what is ‘Value for money’?
Value for money includes economy, efficiency, and effectiveness.
What is the difference between Unincorporated & Incorporated?
Unincorporated organisations include sole traders and partnerships, whereas incorporated organisations include private and public limited companies.
What are stakeholders?
Stakeholders are people or groups with an interest in an organisation’s strategy and activities.
How can stakeholders be classified?
Stakeholders can be classified as internal, connected, and external.
What is the principal/agent problem?
The principal-agent problem occurs when managers (agents) manage an organisation to meet their own needs, not the needs of the owner (principal).
What can be done to resolve the principal/agent problem?
Corporate governance, especially the use of independent non-executive directors, and incentive schemes (PRP and share options) can resolve the principal/agent problem.
What is corporate governance?
Corporate governance is the system by which companies are directed and controlled.
What are the three components of value for money?
The three components of value for money are economy, efficiency, and effectiveness.
Describe Mendelow’s Matrix and its categories.
Mendelow’s Matrix categorises stakeholders based on their power and interest: minimal effort, meet minimum needs (satisfice), keep informed, and key players.
What is the public sector?
The public sector is under government control.
What is the private sector?
The private sector is not under government control.
What are not-for-profit organisations?
Not-for-profit organisations are entities that do not aim to make a profit but rather to fulfill a social mission.
Give examples of public sector not-for-profit organisations.
Examples of public sector not-for-profit organisations include government departments and QUANGOs.
Give examples of private sector not-for-profit organisations.
Examples of private sector not-for-profit organisations include charities, mutuals, and cooperatives.
What are the key performance frameworks for not-for-profit organisations?
The key performance frameworks for not-for-profit organisations include economy, efficiency, and effectiveness.
What is a sole trader?
A sole trader is a person who owns and runs their own business as an individual.
What is a partnership?
A partnership is a business arrangement where two or more individuals share ownership and operation responsibilities.
What is a private limited company?
A private limited company is a type of incorporated business owned by shareholders with limited liability.
What is a public limited company?
A public limited company is a type of incorporated business that can offer its shares to the public.
What is X-inefficiency?
X-inefficiency occurs when an organisation is not producing output at minimum cost, often due to lack of competitive pressure.
What is satisficing?
Satisficing is achieving a satisfactory level of performance rather than the maximum possible.
What is sales maximisation?
Sales maximisation is focusing on increasing sales revenue rather than profits.
What is PRP?
Performance-Related Pay: A type of incentive where employees are paid based on their performance.
What are share options?
Share options are a benefit in which employees are given the right to buy shares in the company at a future date at a predetermined price.
