Organisations and Stakeholders Flashcards
Define and “organisation”
An organisation is a social arrangement for the controlled performance of collective goals
Define the “public sector”
The parts of the economy that provide central or local government services and are under the control of government organisations.
Define the “private sector”
The parts of the economy that are not controlled by the government
What is a PPP or PFI
A partnership/collaboration between the public and private sector.
PPP - public-private partnership
PFI - private-finance initiative
What is a “Quango”?
A quasi-autonomous non-governmental organisation that is funded, but not directly controlled, by the government
What are the three keys for Not-for-profit organisations to achieve their main goal of “Value for Money”?
- Economy - purchase of inputs of appropriate quality at minimum cost
- Efficiency - maximising output from given inputs
- Effectiveness - achieving objectives
What is the difference between an incorporated vs. unincorporated organisation?
An incorporated organisation is legally seperate from its owners (eg. private limited company/public limited company), whilst an unincorporated business in law has no difference between the business and its owners (eg. sole trader/partnership).
Define “Stakeholders”
Stakeholders are people or groups with an interest in an organisations strategy and activities.
Name the three types of stakeholders
I.C.E
- internal
- connected
- external
What is “Mendelow’s matrix”?
A classification of stakeholders on a matrix whose axes are the level of power the stakeholder can exert and the degree of interest the stakeholder has in the organisations activities.
This matrix is used to by organisations to analyse their response to different stakeholder groups,
What is the “principal-agent problem”?
This problem occurs when the managers (agents) are managing an organisation to meet their own needs, not the needs of the owner/provider of finance (principal).
What is “x-inefficiency”?
When managers do not maximise the entity’s performance but instead are concentrating on achieving their own agendas (can occur in both public and private sectors)
How is the principal-agent problem overcome?
By monitoring the actions of management through corporate governance, increased scrutiny of agents or through incentive schemes
What is “corporate governance”?
The systems by which companies are directed and controlled
When does a “separation of ownership from control” occur?
When a firm is controlled by managers and not owners. This means the firm may be run in the interests of the managers and not the owners.
