organisations in private sector - Coggle Diagram
organisations in private sector
public limited company (plc)
Unlike a private limited company, a public limited company can offer shares of the business to the public.
There are some requirements which a company must meet before they can become a Plc.
they must have share capital of at least £50,000
they must have two shareholders, two directors, and a qualified company secretary
Raise more money by selling shares on the stock exchange
Easier to growth and diversify
Disagreements over how to run the company
Threat of take over
Difficult to pursue objectives other than increasing profit
private limited company (ltd)
Companies often need to grow larger than the maximum number of 20 partners allowed in a partnership.
One way of doing this is to become a limited company. Limited companies have limited liability, meaning an investor only loses the initial stake if a company goes bust.
More able to raise money
Owner can retain control
Must be registered with the Registrar of Companies
High set-up costs (legal and administrative)
Harder to motivate and control workers
A multinational organisation is a company which has its headquarters in one country but has assembly or production facilities in other countries. Examples of multinationals include:
-The Coca-Cola Company
bringing expertise in and improving the skills of the workforce
benefiting from economies of scale.
relying ondeskilled jobs that may be low-paid, repetitive assembly line work.
cutting corners. Social responsibility may be overlooked.
exploiting the workforce and/or the environment.
An entrepreneur can opt to set up a new independent business and try to win customers. An alternative is to buy into an existing business and acquire the right to use an existing business idea. This is called franchising.
A franchise is a joint venture between:
A franchisee, who buys the right from a franchisor to copy a business format.
And a franchisor, who sells the right to use a business idea in a particular location.
Many well-known high street opticians and fast food restaurants are franchises.
Opening a franchise is usually less risky than setting up as an independent retailer. The franchisee is adopting a proven business model and selling a well-known product in a new local branch.