Chapter 1- Organisations and stakeholders Flashcards
What is an organisation?
A social arrangement for the controlled performance of collective goals⚽
What is the public and private sector?
Public- parts of economy that provide central or local gov services + are controlled by gov
Private- not controlled by gov
What is it called when a public and private sector collaborate?
Public Private Partnerships (PPP)
Private-finance initiative (PFI)
What sort of industries are public sector organisations?
Schools, hospitals, state owned industries, gov departments and quangos:
Likely to have not for profit objectives
What are the 3 E’s to talk about in regards to value for money?
Economy- purchase of inputs of appropriate quality at minimum cost
Efficiency- maximizing outputs from given inputs, or minimising inputs for a given output
Effectiveness- achieving an organisation’s objectives
What is a quango?
Quasi-autonomous non-governmental organisation, funded by but not directly controlled by gov.
Examples of not for profit organisations in the private sector?
Charities, trade unions , professional bodies (CIMA)
What is a mutual organisation?
provides services for members using member subscriptions
What is a co-operative?
Similar to mutual organisations but deal with tangible goods.
What is the definition of a unincorporated and incorporated profit seeking organisations (w/ examples)?
Unincorporated- law doesn’t recognise difference between the business and its owners (eg sole trader and partnerships)
Incorporated- business in legally separated to its owners (eg PLC and Ltd)
What are some ways stakeholders can influence an organisation?
support management, oppose management, participate with management
What is Mendelow’s matrix?
Shows level of interest and power/influence of stakeholders in a business.
Segment A- givebasic info to e.local community
Segment B- kEEP INFORMED: People should be kept informed as their views can be important in influencing more powerful stakeholders (e.g full-time employees)
Segment C- kept satisfied. E.g gov imposing tax
Segment D- Key players found here. (Any strategy organisation wants to adopt must be acceptable to them at least. E.g CEO
What is the principal-agent problem?
Occurs where managers (the agents) are managing an organisation to meet their own needs, not the needs of the owner/provider of finance (the principal).
Example of management goals other than profit maximization:
Satisficing- managers work hard enough to achieve minimum level of profit that shareholders will be satisfied with.
Sales maximisation- managers believe running a large company brings better benefits and more prestige.
Principal-agent problem in the public sector:
Public workers may use gov money to pay for high salaries
Administrators of a charity may focus the charity’s work on something they are personally interested in.
