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Managing in and beyond corporations (Socially responsible management…
Managing in and beyond corporations
Organisations
NOT-FOR-PROFIT ORGANISATIONS
Charities
Finance
Tax exempt
targets groups not for profit
Profits = Surplus
Losses = Defecit
Aim to work on a low margin
Staffing
Volunteers
Employees
Junior Managers
Based on a benevolent motive
Government organisations
Finance
Government apportions a budget
Organisations provide service within set budget
Focus on efficiency and productivity (
Value maximisation
)
Designed NOT to make a profit
Goods & Services
Merit goods
Taken advantage of as they are needed
Healthcare services
Public goods
Provided for population in general
defence
transport
Includes Services not
reliably
supplied by private sector
Incorporated organisations
Private limited company
Private individual shares
Not public
Connections needed to buy shares
A n D
Disadvantages
Legal constraints
Weak asset base
Not 100% of profits
Advantages
Limited liability
Access to greater capital
Limited liability
Doesn't extend to personal assets
Liability restricted to organisational assets
Aid investment- growth of business
Business is separate legal entity
Appeal to investors- limited personal liability
Only liable for investment (re:losses)
Value of business in chunks- 'shares'
Public limited company
Anyone can purchase shares
Consequence of growth
Floated (private to public)
On share markets
Socially responsible management
two views
classical view
socio-economic view
managers have to decide how organisation fits the environment
lower/socially responsible/greater
step 1: owners and managers
step 2: employees
step 3: constitutes in the specific environment
step 4: broader societ
society have developed
rules of how organisations should be run
expectations of business's
Socially responsible management primarily measured by qualitative objectives
Business responses to social responsiveness can be divided into 4 branches
Social obligations
social responsiveness
Socially obstructive
social contributions
Non- incorporated organisations
Organisations that are not recognised on their own as a ‘legal entity’ – unlimited liability
Sole proprietor- Sole person carrying out some form of business (e.g. farmers, cleaners) for the purpose of profit-maximisation
Disadvantages
Skills limited to owner - labour intensive
Poor economies of scale
Sole responsibility for tasks
Unlimited liability
Advantages
Low cost
100% access to profit
Limited need for formal documentation
Exclusive decision making authority
Total autonomy & independence
Partnership- A business relationship established between two or more persons (e.g. accountants, lawyers)
Advantages
Greater capital
Limited need for formal documentation
100% access to profits & losses shared amongst partners
Tasks can be divided between partners
Disadvantages
Limited independence
Decisions by consultation
Risks associated with exit of partners
Unlimited liability
The external environment, stakeholders & management of organisations
External Environment
general environment
political/legal
economic
sociocultural
demographic
global
technological
specific environment
customers
competitors
suppliers
pressure groups
Stakeholder
Any part of an organisation's external environment that affects and is affected by the organisation's decisions, actions and policies.
Competitors
Trade+ Industry organisations
Social + Political action groups
Governments
Customers
Employees
Suppliers
Shareholders
Unions
environmental uncertainty
degree of change
degree of uncertainty
Diagram: The external environment
