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7. summary of organisation characteristics
A private limited company aims to maximize profits and expand the business, with ownership held by shareholders who are usually friends and family. Control lies with shareholders and directors, and finance comes from shareholder investment and retained profits. A public sector organization provides services not addressed by the private sector, with ownership by taxpayers and control by elected councillors or government-appointed boards. It is financed mainly through government funding and income from services.
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7. summary of organisation characteristics
- 1. Learning Intention Types ofOrganisation Revision By the end of this lesson you will be able to: identify the differing types of ownership, control and finance within organisation understand the differing objectives of organisation construct a suitable answer to a compare question on the above topics
- 2. Challenge Question Compare theobjectives of a private limited company when compared to a public sector organisation in terms of ownership, control and finance. (3)
- 3.
- 4. Sector • Public Corporation- public • Partnership - private • Charity - voluntary • Sole Trader - private • Private Limited Company - private • Local Authority - public • Voluntary Organisation - voluntary • Public Limited Company - private
- 5. Example BBC NHS Dental Practice Oxfam Cancer Research Local Builder ArnoldClark Ltd Inverclyde Council Boys Brigade Girls Brigade RBS plc Barr plc
- 6. Example • Public Corporation– BBC, NHS • Partnership – Dental Practice • Charity – Oxfam, Cancer Research • Sole Trader – Local builder • Private Limited Company – Arnold Clark Ltd • Local Authority – Inverclyde Council • Voluntary Organisation – Boys Brigade, Girls Brigade • Public Limited Company – RBS plc, Barr plc
- 7. ObjectivesTo provide aservice Not addressed by private sector To make best use of funds To raise funds To raise awareness of cause To eliminate social problem To survive To maximize profit To maximize profits To expand To build a good reputation To maximize profits To expand company To increase reputation To extend product range To increase membership To promote sport/activity To meet needs of members To survive/satisficing To maximize profit To growth the business Provide best service to public To cover all costs To stay within budget limits
- 8. Objectives • Public Corporation- Provide best service to public, To cover all costs, To stay within budget limits • Partnership - To survive, To maximize profit • Charity - To raise funds, To raise awareness of cause, To eliminate social problem • Sole Trader - To survive/satisficing, To maximize profit, To growth the business • Private Limited Company - To maximize profits, To expand, To build a good reputation • Local Authority - To provide a service not addressed by private sector, To make best use of funds • Voluntary Organisation - To increase membership, To promote sport/activity, To meet needs of members • Public Limited Company - To maximize profits, To expand company, To increase reputation, To extend product range
- 9. Ownership Shareholders Members Government Tax PayersShareholderswho are family and friends (2 – 50) Partners (2 – 20) Owner Wholly owned by government Members
- 10. Ownership • Public Corporation– wholly owned by government • Partnership – partners (2-20) • Charity – members • Sole Trader – owner • Private Limited Company – shareholders who are family and friends • Local Authority – government/tax payers • Voluntary Organisation - members • Public Limited Company - shareholders
- 11. Control Board of Directors/ Management Owner CommitteeManagers Councillors Appointed Directors of Service Partners Managers Committee Board of Governors/ Management Trustees Shareholders Directors Managers
- 12. Control • Public Corporation– Board of Governors/Management Trustees • Partnership – Partners, managers • Charity – Committee Members • Sole Trader – Owner • Private Limited Company – Shareholders, Directors, Managers • Local Authority – Councillors, Appointed Head of Service • Voluntary Organisation – Committee • Public Limited Company – Board of Directors/Management
- 13. FinanceGovernment funding Income fromservices Raising Funds Grants Shareholder investment Retained profits Bank loans/overdraftsFund raising Membership fees Grants Savings Borrowing Set-up grants Banks Share issue to general public Debenture issue Retained profits Bank loans Local taxes Government funding Capital from new partners Savings Loans
- 14. Finance • Public Corporation– Government Funding, Income from Services • Partnership – Capital from new partners, savings, loans • Charity – raising funds, grants • Sole Trader – own savings, borrowings, set-up grants, bank • Private Limited Company – shareholders investment, retained profits, bank loans/overdraft • Local Authority – local taxes, central government funding • Voluntary Organisation – fundraising, grants, memberships fees • Public Limited Company - Share issue to general public, Debenture issue, Retained profits, Bank loans
- 15. Challenge Question Compare theobjectives of a private limited company when compared to a public sector organisation in terms of ownership, control and finance. (3)