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Week 3: Organisation types - Coggle Diagram
Week 3: Organisation types
Incorporated Organisations
Recognised as its own legal entity
Has limited liability
Means the value of the business is broken into shares
Agents manage shareholder interests
No private assets implicated if business performs poorly
Why is it needed?
Entices investors
Can fund greater investment if needed
Advantages & Disadvantages
Advantages
Limited liability
Access to greater capital
Disadvantages
Legal constraints & procedures
Weak asset base could limit funding sources
Investors not entitled to 100% of profits
Not-For-Profit Organisations
Types
Charities
Product product/service for target group without profit
No focus on profit
Exempt from taxes
Staffing
Market Rates/below market rates/volunteers
operating cost base lower
Govt Organisations
Benefit taxpayers
Taxpayer revenue funding
Supply goods/services private sector cannot
Public goods
police
transport infrastructure
Defense
Merit goods
education
social security and unemployment benefits
Health services
Not for profit but maximize value
Productivity key to success
Strict budget given for each department, ministry, & authority
Similarities between For & Not-For-Profit Organisations
Consists of people, produce product/service, satisfy consumers, has several managerial systems
Non-Incorporated Organisations
not recognised as legal entity
unlimited liability
personal assets are at stake
Pros
owners have high level of control
low start up cost
limited need for formal documentation
Cons
owner is responsible for all the tasks
skills is limited within the business
sole trader
a business run by one owner
partnership
owned by 2-20 people
partners have joint unlimited liability
the External Environment, Stakeholders, & Management of Organisations
general
global
sociocultural
Demographics
technological
political
Specific
Competitors
Customers
Suppliers
Public Pressure groups
Stakeholders
People with stake in organisation's decisions, actions, and policies (business & success)
Internal & external groups included
Importance
Affect organisational outcomes
"right" thing to do
Stakeholder Management
Employees, customer, unions, shareholders, communities, suppliers, media, govt,trade and industry association, competitors, social and political action groups
Social Responsibility Management
Managers must determine how their org. fits with its
environment
Rules developed by society which shape how organisations should be managed
Two views in this aspect
The classical (conventional) view
Focuses on owners & managers
The socioeconomic (sustainable) view
Focuses on broader society