The Business Organisation

Question 1

Define what all organisations have in common using Buchanan and Huczynski’s definition.

Answer 1

‘Organisations are social arrangements for the controlled performance of collective goals.’

Question 2

Note the three key aspects that define an organisation and give examples of each.

Answer 2

• collective goals i.e the main goal of a school is to educate pupils.
• social arrangements i.e organisations are structured to allow people to work together towards a common goal.
• controlled performance i.e an organisation will have systems and procedures in place to ensure that group goals are achieved.

Question 3

Name a major similarity between most organisations.

Answer 3

Most organisations are mainly concerned with taking inputs and transforming them into outputs.

Question 4

Which of the following would not be considered to be an organisation according to the definition produced by Buchanan and Huczynski?

A a sole trader
B a tennis club
C a hospital

Answer 4

A sole trader as has to be part of a ‘collective’

Question 5

Name three examples why we need organisations

Answer 5

Share skills and knowledge

Specialise

Pool resources

Question 6

Explain the meaning of synergy

Answer 6

Synergy allows organisations to achieve more than the individuals could on their own

Question 7

Outline the three aspects within organisations that lead to synergy.

Answer 7

Share skills and knowledge
Specialise
Pool resources

Question 8

Name the three common forms that a commercial organisations can take

Answer 8

Sole traders

Partnerships

Limited liability companies

Question 9

Explain the term sole traders

Answer 9

Owned and run by one person

Owner is not legally separate from the business

Question 10

Explain the term partnership

Answer 10

Owned and run by two or more individuals.

Traditionally do not have separate legal identity from owners although some have created alternative partnership structures (such as LLP) which means business exists as separate legal entity and the owners liability is limited to the amount they have invested into the partnership

Question 11

Explain the term limited liability companies

Answer 11

Company has separate legal identity to its owners (who are known as shareholders). Owners liability limited to amount invested into the company

Question 12

Name the two types of limited companies (UK)

Answer 12

Private limited companies

Public limited companies

Question 13

What three letters would be in a private limited company?

Answer 13

Ltd

Question 14

What three letters would be in a public limited company?

Answer 14

Plc

Question 15

Can shares be offered to the general public in a private limited company?

Answer 15

No

Question 16

Can shares be sold to the public in a public limited company?

Answer 16

Yes

Question 17

What are the two abbreviations for not for profit organisations?

Answer 17

NFPs and NPOs

Question 18

What is one key difference between NFP organisations and commercial organisations?

Answer 18

They do not see profitability as their main objective.

Question 19

Name 3 examples of NFPs

Answer 19

Government departments and agencies I.e HMRC

Schools

Hospitals

Charities I.e Red Cross, oxfam Doctors Without Borders

Clubs

Question 20

Name 3 organisations that are public sector organisations (U.K.)

Answer 20

Police
Military
Public transport
State education 
Healthcare I.e NHS

Question 21

Name three types of organisations that are considered private sector

Answer 21

Businesses

Charities

Clubs

Within these will be both profit-seeking and NFP organisations

Question 22

Define a non-governmental organisation (NGOs)

Answer 22

An organisation which does not have profit as its primary goal and is not linked to the national government.

Question 23

Name two example of NGOs

Answer 23

The Red Cross

Doctors Without Borders

Green peace

Amnesty international

Question 24

Define a co-operative

Answer 24

Organisations that are owned and democratically controlled by their members

Question 25

Who will share the profit from a co-operative?

Answer 25

Members will share any profits

Question 26

Name three sectors in which organisations operate

Answer 26

Agriculture

Mining

Finance

Retailers

Service

Transportation

Question 27

Name three of the key difference between the various types of organisations

Answer 27

Ownership

Objectives

Activities

Sources of funding

Size

Liability