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Managing In and Beyond Corporations (Incorporated organisations (How it…
Managing In and Beyond Corporations
Non-Incorporated Organisations
Not recognised as a 'Legal Entity'
Sole Propreitor
Advantages
Low Costs
100% Acess to profits
Exclusive decision Making
Limited need for formal documentation
Disadvantages
Sole responsibility
Skills Limited to Owner
Poor Economies of Scale
Unlimited Liability
Partnership
Advantages
More capital
Partners can share losses
More ideas, opinions
Limited need for formal documentation
Tasks are shared between partners
Disadvantages
Decision making is more complicated, you need approval from all partners
Limited Independance
Partners have to share profits
Unlimited Liability
Risk associated with the exit of partners
Incorporated organisations
Organisations recognised as their own entity - no liability
To grow greater investment is needed
entices investors
How it works
Value of business broken into shares
Agents of rganisation look after shareholder interests
Liability associated with losses incurred as a consequence or organisational failure limited to orgnanisational assets
Advantages
Limited liability
Access to greater capital
Disadvantages
Legal constraints and procedures
weak asset base could limit funding source
Investors not entitled to 100% of profits
Types of incorporated organisations:
Private
Shares owned by private individuals (up to 50)
To purchase shares need to directly approach an existing shareholder, often requires consent from other shareholders
Not available to public
Public
Anyone can purchase shares through stock exchange
Often a consequence of growth
Change from private to public referred to as an org being 'floated'
Not-For-Profit Organisations
Government Organisations
Funded through taxpayer revenues
Exists for their benefits
Provides goods or services that cannot be provided by private sector (Defence, transport)
Goal is not profit
Strict Budget
Charities
Primary goal is to provide goods or services for a targe tgroup
Profits - Surplus, Losses - Deficit
Exempted from taxes
Staffing - Paid Staff and Volunteers
Operate on lower cost base than for-profit organisation
Limited Company
boys how are we
• The profits, losses, assets and liabilities belong to the company which is owned by its members, the shareholders, and run by managing directors.
• This gives the directors limited liabilities and, if the company should fail, the personal assets of the directors are protected.
• When customers, suppliers or employees deal with limited companies the contracts they make are with the company
and not with the employees they deal with.
Limited Liability
• It allows many people to invest in a business which is god for the business’s growth and development.
• If the business succeeds, the investors benefit from a share of the business’s profits.
• However, if the business fails then the investors will not be liable for anything other than the value of their initial investment.
stakeholders
any constituency in an organisations environment that both
affects and is affected by the organisations decisions,
actions and policies
the relationship is vital because it can affect organisational outcomes such as improved predictability of changes
Socaillt Responsible Management
Managers have the burden of determining how their organisation fits with the environment
Society has developed an idea of how business should be transacted and how organisations should be managed
Classical view (conventional)
Socio-Economic view (sustainable)