Business Organisation Ch - 1

Question 1

What is an organisation ? By (buchanan and Huczynski) ?

Answer 1

Organisations are social arrangements for the controlled performance of collective goals.

Question 2

Main similarity between organisations ?

Answer 2

They take input and makes output.

Question 3

Why people need organisations.?

Answer 3

Share skill and knowledge

Question 4

Two main category of organisations?

Answer 4

Commercial and not-for-profit

Question 5

Categories under commercial organistions?

Answer 5

Sole trader- Run by one dude. Liabilities on the owner
Partnership - Owned and run by two or more.
Limited liability companies.
#Private limited
#Publlic limited

Question 6

How partnership business is structure legally? (commercial businesses)

Answer 6

Traditionally partnerships did not have a legal identity from their owners. So when you sue you sue them. But recently many countries have created alternative partnership structures such as LLPs (limited liability partner) where they exist as separate legal entity and the owners liability is the amount they have invested into the partnership.

Question 7

Difference between public limited and private limited comapanies.?

Answer 7

Private limited companies tend to smaller businesses owned by a few shareholders. Shares cannot be offered to the general public

Public limited companies are larger businesses with large amount of shareholders and common public which makes it easier for the company to raise finance.

Question 8

What are LLPs?

Answer 8

Limited liability partners legal commitment only for the amount they have invested into the partnership.

Question 9

Three types of business entities?

Answer 9

Sole trader
Partnership
Limited Liabilities company.

Question 10

What are limited liability companies?

Answer 10

They are established as separate legal entities to their owners. achieved through INCORPORATION. The owners (SHAREHOLDERS)

Question 11

What are NFPs?

Answer 11

Not-For-Profit are organization set up to satisfy a particular need of their members or provide help and benefits to different parts of society.

Example: Red Cross, Oxfam, Doctors without borders.

Question 12

Example of NFPs?

Answer 12

Gov departments and agencies- HM revenue and Customs

Schools and Hospitals

Charities (Red cross)

Clubs

Question 13

What are public sector organisations?

Answer 13

The organisations controlled by the government that is concerned with providing basic government services.

Question 14

Examples of Public sector organisations?

Answer 14

Police
Military
Public transport
primary education
healthcare for financially challenged (poor)

Question 15

Private sector organisations? Examples?

Answer 15

Organisations run by private individuals or groups.

Businesses
Charities
clubs

Question 16

What does private sector organisations include?

Answer 16

Both profit seeking and NFP organisation are inluded in private sector.

Question 17

Another name for NFP?

Answer 17

NPO

Question 18

What are NGOs?

Answer 18

Non governmental organisations - These are organisation neither geared toward profit making nor belongs to the national government.

THEY OFTEN PROMOTE POLITICAL SOCIAL OR ENVIRONMENTAL CHANGE WITHIN THE COUNTRIES THEY OPERATE.

Question 19

NGO’S EXAMPLE?

Answer 19

RED CROSS - ALSO AN NFP

DOCTORS WITHOUT BORDERS - NFP

GREENPEACE - NFP

AMNESTY INTERNATIONAL- BASED IN UK FOR HUMAN RIGHTS

Question 20

How does voting take place in Limited liabilities companies?

Answer 20

Usually the shareholders get one vote for each of their shares they own.

Question 21

How does voting take place in Co-operatives?

Answer 21

Each member will get one vote regardless whether thy own shares or not.
One difference between Co-operatives and LLCs

Question 22

What are co-operatives? think democracy?

Answer 22

Organisations that are owned and DEMOCRATICALLY controlled by their members that is the people who buy their goods or services.

They are like the discount cards you get from sobeys

Question 23

Example of a Co-operative from UK?

Answer 23

Co-operative Group over 5.5million members
Barcelona football club is owned by fans

Question 24

How to differentiate between organisations ?

Answer 24

Ownership

Private Sectors- Owned by Shareholders or indiviuals
Public Sector - Owned by governments
Co-operatives - Owned by members (consumers, residents etc)

Objectives.

Private Sectors- Maximisation of owner wealth.
Public Sec and charities - Social services (mostly)

Source of Funding

Public Sector - Money from central gov
Private sector organisation- Shareholders/owners

Size

Liability. Who is responsible when sued

Question 25

Co-operatives is a _________ organisation

Answer 25

Private sector.

Question 26

Types of organisation?

Answer 26

Profit seeking v NFP
Private v public
Co-operatives
NGOs

Question 27

Some note on sole traders (important)?

Answer 27

Sole traders may have employees

A sole traders is fully liable for the debts of the business (no business entity concept at work here)

A sole trader may have more than one place of business. (perhaps with the help of employees or managers)

Question 28

Important notes on limited liability companies?

Answer 28

It is a separate legal entity from and can own assets, incur liabilities.

Members of limited liability companies do not have right to participate in management of that company.

Question 29

Notes on partnership?

Answer 29

Each partner has a limited liability for the debts of the partnership.

There is no formal partnership/incorporation documents for delegation of roles, right and duties.