Different Types Of Firms

Question 1

Public sector organisations

Answer 1

Owned and controlled by the state

e.g NHS

Question 2

Private sector organisations

Answer 2

Owned by private investors

Question 3

Not for profit

Answer 3

Operate commercially but with social welfare and environmental aims. Reinvest for social purposes

Question 4

Principal agent problem

Answer 4

When there is a conflict of interest between managers and directors.

Managers- profit for higher wages
Directors- social responsibility for better brand image