bm-1.2 types of organizations


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IB Business and Management (Standard Level)
All material taken from the IB Business and Management Textbook:
"Business and Management", Paul Hoang, IBID Press, Victoria, 2007

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bm-1.2 types of organizations

  1. 1. Business and Management : 1.2 Types of Organizations <ul><li>Lesson 1-3 : Non-Profit & </li></ul><ul><li>Non-Governmental </li></ul><ul><li>Organizations </li></ul>
  2. 2. 1. Focus Question <ul><li>What are non-profit organizations ? </li></ul><ul><li>What are non-governmental organizations ? </li></ul><ul><li>What are the advantages and disadvantages of each? </li></ul><ul><li>… </li></ul>
  3. 3. 2. Non-profit Organizations <ul><li>An incorporated organization which exists for educational or charitable reasons, and from which its shareholders or trustees do not benefit financially . </li></ul><ul><ul><li>also called not-for-profit organization . </li></ul></ul><ul><li>Run without profit being the major concern. </li></ul><ul><li>They main objective is to provide a service or to promote special causes . </li></ul><ul><li>What are some examples of NPOs? </li></ul>
  4. 4. 3a. Non-governmental Organizations <ul><li>Mainly operate in the private sector . </li></ul><ul><ul><li>It is not owned by the government. </li></ul></ul><ul><li>Main aim is not for profit . </li></ul><ul><ul><li>They are set up and run to benefit society . </li></ul></ul><ul><ul><li>Are independent from the government. </li></ul></ul><ul><ul><ul><li>Are also known as Private Volunteer Organizations (PVOs). </li></ul></ul></ul><ul><ul><ul><ul><li>Examples: Amnesty International (human rights) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Unicef (children’s welfare) </li></ul></ul></ul></ul><ul><li>What are the two types of NGOs ? </li></ul><ul><ul><li>Operational NGOs … </li></ul></ul><ul><ul><ul><li>Tend to be involved in relief-based and community projects. </li></ul></ul></ul><ul><ul><li>Advocacy NGOs … </li></ul></ul><ul><ul><ul><li>Such as Green Peace and others…tend to be more aggressive in defending their cause. </li></ul></ul></ul><ul><ul><ul><li>They promote awarness through direct action. </li></ul></ul></ul>
  5. 5. 3b. Non-governmental Organizations <ul><li>What are QUANGOs ? </li></ul><ul><ul><li>Quasi-autonomous non-governmental organizations…wow that’s a mouth full :P </li></ul></ul><ul><ul><ul><li>So what does that mean ? </li></ul></ul></ul><ul><ul><ul><ul><li>They are considered semi-NGOs . </li></ul></ul></ul></ul><ul><li>They are funded by the government, but run by non-government people . </li></ul><ul><ul><li>They tend to support certain interests of the government. </li></ul></ul>
  6. 6. 4. Charities <ul><li>What are Charities ? </li></ul><ul><ul><li>A type of NPOs . </li></ul></ul><ul><ul><li>Major function is to collect donations to support a cause that helps society. </li></ul></ul><ul><ul><ul><li>Such as Oxfam and World Wild Life Fund. </li></ul></ul></ul><ul><ul><ul><li>Similar to a Limited Company…some of the board of directors are paid, others volunteer their time. </li></ul></ul></ul><ul><ul><ul><ul><li>Even though they are not-for-profit, this doesn’t mean they don’t try to gain a surplus … </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Do you remember what a surplus is ? </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>It does not get classified as a profit, because it does not get distributed to the workers or owners of the organization. </li></ul></ul></ul></ul></ul>
  7. 7. 5. Advantages of Charities <ul><li>Advantages : </li></ul><ul><ul><li>Provide financial support for the welfare of society . </li></ul></ul><ul><ul><ul><li>Raise money for medical research; cancer etc.. </li></ul></ul></ul><ul><ul><ul><li>Usually exempt from paying taxes. </li></ul></ul></ul><ul><ul><ul><li>Donors who give money are tax exempt. </li></ul></ul></ul><ul><ul><ul><li>Can have limited company. </li></ul></ul></ul><ul><li>Disadvantages : </li></ul><ul><ul><li>Lack of profit = lack of incentive…services may not be render for long periods of time. </li></ul></ul><ul><ul><li>Trustees not allowed to gain financial benefits. </li></ul></ul><ul><ul><li>Must go through a registration process . </li></ul></ul><ul><ul><li>All financial activities MUST be recorded and reported (to prevent charity fraud). </li></ul></ul><ul><ul><li>Can have limited liability, could lead to fraud as owners are not responsible. </li></ul></ul><ul><ul><li>Survive based on donations. – lots of competition = limited finances. </li></ul></ul>
  8. 8. 6. Pressure Groups <ul><li>Are also non-profit organizations. </li></ul><ul><ul><li>They address a special interest of the group. </li></ul></ul><ul><ul><ul><li>Trade unions, animal rights, environmental protection groups. </li></ul></ul></ul><ul><ul><ul><li>The aim to win public support and media support for their actions. </li></ul></ul></ul><ul><ul><ul><li>They try in influence government legislation. </li></ul></ul></ul><ul><li>One advantage : </li></ul><ul><ul><li>They force businesses and the government to take account of the true costs of business activity… </li></ul></ul><ul><ul><ul><li>Such as pollution, environmental damage etc… </li></ul></ul></ul>
  9. 9. 7. Types of Organizations <ul><li>See pg. 38 IBO Textbook. </li></ul>