business structure
private and public structure
private sector - includes all businesses that are set up by individuals or group of individuals eg .sole traders , partnership , companies , charities
public sector- essentially a businesses activity that is owned /ran by the government for the benefit of everyone eg police , schools, hospitals , army
goods - items produced by the conversion of raw materials into finished products by the secondary sector eg physical product
consumer goods- goods that are used by the consumer
producer goods - items that are brought by another business and are used to help make other goods e.g photocopier
single use- items that can only be used once, e.g ice cream , coffee
durable- items that can be used over and over again eg car , kettle
services - a task performed in return for payment , this includes personal / direct services
e.g - hairdresser, banking , and insurance services
aims and objects
aims - long -termm intentions that provide a focus for setting objetives
objectives- medium to long term targets that can give a sense of direction to a manager or department
private sector aim - survival , profit minimisation, maximising growth , gaining market share , social aims, ethical aims , improved quality , environmental
public sector aims - provide a universal service, make a trading surplus if possible , ensure effective provision of public goods
public goods - goods that would not be provided in a free market system, because firm would not be able to charge for them
they have two characteristics :
non-rivalry- the consumption of the good by one individual does not reduce the amount available for others
Non-excludability it is impossible to
exclude others from benefiting from their use
merit goods - Merit goods are goods that could be provided by the free market but policy makers recognise that they would be under-consumed. There are external benefits in providing these goods and services and they are provided free of
charge by the Government
click to edit
click to edit
importance of public sector-
click to edit
Goods and services needed in our everyday
lives (public goods) would not be provided by
the private sector who are looking to make
profits
sole traders - : Owned and run by one individual but
they may employ people.
advantages - independance / own boss
increase rewards , privacy of benefit affairs
disdavantages - unlimited liability , more responsibility , working long hours , limited sources or resources
reasons why someone wants to set up their own business
financial rewards- the opportunity to become better off/ earn more than current employment
independence - enjoying being in control rather than being employed meaning a greater degree of flexibility
personal satisfaction - building your own business may encourage individuals to reach higher goals in life
prefer to work on there own- one man/ woman business is uncommon
interst- may be passionate about the product
take over a family business - wanting to keep supporting family goals
identifying gaps in the markets - can exploit an opportunity to increase wealth
lack of employment opportunities- people made redundant and unable to find a job
encouragement by external / governmental agencies to set up own business-support and advice offered by agencies eg princes Trust
partnership
definition - owned and run between 2-20 people
deed of partnership- the partners may choose to draw up a "deed of partnership, which is a legal agreement setting out the rights and responsibilities of the partners.
advantages : share resources and ideas
cover for each other
more sources of finance
shared responsibility and decision making
disadvantages : unlimited liability
loss of control
slow decision making , disagreements between partners , profits must be shared between partners