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Introduction To The business Environment (Structure of a organisation…
Introduction To The business Environment
Case study of Siyafunda that started as a sole trader and expanded to a listed company
James Khumalo a student of a university got a bursary to study but the bursary did not cover for his daily living expenses.
He then decided to open a kiosk at campus , which was affordable to the students , in which he got a loan from his lecturer
As the years went and the business flourished , James and his lecturer decided to go into a partnership , and register a private company
Concept of goverance framework for a private company includes the following:
Regular board meetings ,
regular meetings with staff , * Risk management , etc
Governance - all the actions related to governing or leading an organisation
Corporate governance- all the actions related to governing a organisation
Strategic planning and appointment of directors
In the case study of Siyafunda , after another successful year , the directors( James being the executive director and Peter the non executive director) held a strategic planning session. The business needed to expand to facilitate growth and diversification
James became the chief executive officer(CEO). Peter became the chief operating officer (COO)(responsible for business strategy and marketing). William came the chief financial officer (CFO). Susan came the director of human resource
During a directors meeting , the CFO suggested them going from a private company to a public company , so that they issue their shares to the public for competitive advantage
Converted from private company Pty(ltd) to public company Ltd
In the private company , the director's legal and financial liability is limited
The partners share in the profits
When listing a company and offering shares to the public , the company has to adhere to the companies act of 2008 and King report on corporate governance, through:
board and committee
ethical organisational culture
risk management
Structure of a organisation
Shareholders- the owners of the organisation ( they receive the AFS , appoint directors , auditors
Board of directors- they are in charge of the organisation ( prepare the AFS)
Senior management which is the CEO - they manage the organisation on a daily basis
External auditors-provide assurance on the financial and non-financial affairs of the company
Audit committee - reports to the board on the activities that is occurring the business to the external auditors
Internal audit activity- evaluate and improve the effectiveness of governance , risk management and control processes