Chapter 1 - The Business Organisation Flashcards
What is an organisation?
‘Organisations are social arrangements for the controlled performance of collective goals’ (Buchanan & Huczynski)
Why do we need organisations?
Enable people to:
- Share skills and knowledge
- Specialise
- Pool resources
Classify organisations by profit orientation.
- Profit seeking organisations
- Not-for-profit organisations
~ (Mutual organisations)
What are the objectives of a ‘profit seeking’ organisation?
- To continue in existence (survival)
- To maintain growth & development
- To make a profit
What are the objectives of a ‘not-for-profit’ organisation (‘NFPs’ or ‘NPOs’)?
Objectives vary tremendously:
- Hospitals exist to treat payments
- Councils care for their communities
- A charity provides relief to victims of disasters
- Govt organisations implement govt policy
What are some examples of NFPs/NPOs?
- Govt departments & agencies (e.g. HMRC)
- Schools
- Hospitals
- Charities
- Clubs
What is a mutual organisation?
Voluntary not-for-profit associations formed for the purpose of raising funds by subscription of members, out of which common services can be provided to those members.
What are some examples of mutual organisations?
- Some building societies
- Trade unions
- Some working-men’s clubs
Classify organisations by ownership/control.
- Public sector organisations
- Private sector organisations
- Co-operatives
What is a public sector organisation?
That part of the economy that is concerned with providing basic govt services & is thus controlled by govt organisations.
What are some examples of public sector organisations?
- Police
- Military
- Public roads
- Public transit
- Primary education
- Healthcare for the poor
What is a private sector organisation?
Comprising of non-govt organisations, is that part of a nation’s economy that is not controlled by the govt.
What are some examples of private sector organisations?
- Businesses
- Charities
- Clubs
Within these will be profit-seeking & NFPs/NPOs.
What is a Co-operative?
An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
What are the main characteristics of co-operatives?
- They are owned and democratically controlled by their members (the people who buy their goods or use their services). They are not owned by investors.
- They are organised solely to meet the needs of the member-owners, not to accumulate capital for investors.
How do co-operatives differ from mutuals?
They are similar in that they are owned by the members/clients they exist for. However, they tend to deal in primary tangible goods and services (e.g. Agricultural commodities, utilities) rather than intangible products (e.g. Financials services).
What are the main departments in a business organisation? (8)
- R&D
- Purchasing
- Production
- Direct service provision
- Marketing
- Administration
- Finance
- Human Resources
What is the role of the R&D department?
- Improve existing products
- Developing new products
What are the key concerns of the R&D department?
- Anticipating customer needs
- Generating new ideas
- Testing
- Cost
What is the role of the Purchasing department?
- Acquiring the goods and services necessary for the business
What are the key concerns of the Purchasing department?
- Price and payment terms
- Quality
- Stock levels/delivery schedules
What is the role of the Production department?
- Converting raw materials into finished goods
What are the key concerns of the Production department?
- Quality (of materials & finished goods)
- Costs
- Wastage/efficiency
- Stock levels/Production schedules
What is the role of the Direct Service Provision department?
- Providing services to clients (e.g. Accountancy firm)
What are the key concerns of the Direct Service Provision department?
- Quality
- Time sheets/scheduling
What is the role of the Marketing department?
- Identifying customer needs
- Market research
- Product design
- Pricing
- Promotion
- Distribution
What are the key concerns of the Marketing department?
- Customer needs
- Quality
- Promotional strategy
- Distribution channel strategy
- Pricing strategy
What is the role of the Admin department?
- Administrative support
- Processing transactions
What are the key concerns of the Admin department?
- Efficiency
- Information processing
What is the role of the Finance department?
- Bookkeeping
- Financial reporting
- Financial controls
- Budgeting
- The raising of capital
What are the key concerns of the Finance department?
- Accuracy & completeness of record keeping
- Monthly management reporting
- Annual financial reporting
What is the role of the Human Resources department?
- Job analysis & job design
- Recruitment & selection
- Performance appraisal
- Rewards (e.g. Setting pay)
- Training & development
- Grievances & discipline
What are the key concerns of the Human Resources department?
- Staff competence
- Staff commitment/motivation
- Cost
- Staff welfare (e.g. Stress)
- Compliance (e.g. Equal opportunities legislation)
