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1.2 TYPES OF ORGANISATION (TYPE OF ECONOMIES (FREE-MARKET ECONOMY -…
1.2 TYPES OF ORGANISATION
SECTORS
PUBLIC
- comprises organisations accountable to and controlled by central or local government
PRIVATE
- comprises business owned and controlled by individuals or groups of organisations ( for-profit businesses )
TYPE OF ECONOMIES
FREE-MARKET ECONOMY
- economic resources are owned largely by the private sector with very little state intervention
COMMAND ECONOMY
- economic resources are owned, planned and controlled by the state
MIXED ECONOMY
- economic resources are owned and controlled by both private and public sectors
DISTINCTION BETWEEN THE SECTOR
PUBLIC SECTOR
(
ensure supplies of essential goods and services
)
,
(
preventing private monopolies
)
,
(
maintaining employment
)
,
(
maintaining environmental standards
)
*
PRIVATE SECTOR
(
charities are non-profit-making organisations
)
,
(
did not owned and controlled by the government
)
PRIVATIZATION
-
the sale of public sector organisations to the private sector
THE MAIN FEATURES OF THE FOLLOWING TYPES OF FOR-PROFIT (COMMERCIAL) ORGANISATIONS
SOLE TRADER - a business in which one person provides the permanent finance and in return, has full control of the business and is able to keep all the profits
involves finance for expansion. Important to dependent on the savings, profits made, and loans for injections of capital
ADVANTAGES -
(
easy to set up
)
,
(
owner has complete control
)
,
(
able to choose times and patterns of working
)
DISADVANTAGES -
(
unlimited liability- potential at risk
)
,
(
faces intense competition
)
,
(
difficult to raise additional capital
)
PARTNERSHIP - a business formed by two or more people to carry on a business together , with shared capital investment and usually shared responsibilities
-
(
to overcome some of the drawbacks of being a sole trader
)
,
(
choose partner business carefully
)
,
(
provide agreement on issues
)
,
(
most common form of organisations
)
ADVANTAGES -
(
shared decision-making
)
,
(
additional capital injected by each partner
)
, silent partners
)
,
(
experties
)
DISADVANTAGES -
(
unlimited liability for all partners
)
,
(
profits are shared
)
,
(
will lose independence of decision making if sole trader involve
)
COMPANIES/CORPORATION
LIMITED COMPANY
LEGAL PERSONALITY
legally recognized as having an identity separate from that of its owner
a company can be sued and can sue others through the court
CONTINUITY
ownership continues through the inheritance of the share
LIMITED LIABILITY - the only liability or potential loss a shareholder if the company fails is the amount invested in the company , not the total wealth of the shareholder
divided into small units (
share
), be
stakeholders
if buy
share
,
people are prepared to provide finance to enable companies expand
the greater risk of the company failing to pay its debts is now transferred from investors to creditors
THE MAIN FEATURES OF THE FOLLOWING TYPES OF FOR-PROFIT SOCIAL ENTERPRISES
MICROFINANCE PROVIDERS
- the provision of very small loans by specialist finance businesses, usually not traditional commercial banks
PUBLIC-PRIVATE PARTNERSHIPS (PPP)
government-funded
private sector-funded
government
have potential cost and benefits
COOPERATIVES
creating value for customers and secure employment for workers
GROUP OF COOPERATIVES
RETAIL COOPERATIVE
AGRICULTURAL COOPERATIVE
WORKER COOPERATIVE
THE MAIN FEATURES OF THE FOLLOWING TYPES OF NON-PROFIT SOCIAL ENTREPRISES
NON-GOVERNMENTAL ORGANISATIONS (NGOs) - a legally constituted body with no participation or representation of any government which has a specific aim and purpose :star:
non-profit organisation
ADVANTAGES -
(
government will help with subside and grants
)
,
(
will pay a low tax
)
,
(
private company will help NGO too with protection and helping
)
EXAMPLES OF NGOs -
(
Article 19
)
,
(
Ford Foundation
)
,
(
MacArthur Foundation
)
CHARITIES - an organisation set up to raise money to help people in need or to support causes that require funding
- allowed tax benefits, perform useful social and environmental functions, work in duplicated
there's activities that accepted as being for 'charitable purposes' such as
prevention or relief of poverty
,
advancement of education/religion/healt