UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT

1. UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT LO1: EXPLAIN THE DIFFERENT TYPES,SIZE AND SCOPE OF ORGANISATIONS

2. UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT P1: EXPLAIN DIFFERENT TYPES AND PURPOSE OF ORGANISATION: PUBLIC,PRIVATE AND VOULUNTARY SECTORS AND LEGAL STRUCTURES

3. Why do we set up Organisations? The Purpose of an organization is not the answer to the question “What do you do?” which typically focuses on products, services and customers, but rather the answer to the question “Why is the work you do important?” Employees should find the Purpose inspirational and motivational. It is the cause that defines their contribution to society through work. Businesses exist to make a profit, but they also exist to make a difference. Through work, individuals can make a difference and be part of a meaningful legacy.

4. How Organisations make known their purpose. Mission Statements- A mission statement brings your essence into focus so it is crystal clear who you are, what you do, and why you do it. Vision- Is a declaration of an organization's objectives, ideally based on economic foresight, intended to guide its internal decision-making. Foretelling where it is going or reach in a specified time.

5. For-Profit and Non-Profit Organisations For- Profit: Business organisations with a “ for-profit” element, shops, supermarkets, banks. Non Profits- Government entities, charities, churches, Service clubs.

6. Business Organisations • Sole traders - A sole proprietorship is a business owned and operated by one individual • Partnerships- Is a business association between to or more owners of an enterprise Usually have between 2-20 persons.

7. Business Organisations • Private Limited Company- The owners are called “ Shareholders”, This is because they each own a share in the business. Private limited companies must have at least two shareholders, no maximum limit to the number of shareholders. Share holdings is usually limited to known friends and family. • Public Limited Company- Similar to the Private Limited Company, minimum of two shareholders are needed to incorporate a Public Limited Company. Key differences are that shareholders are not necessarily known to each other, and the company will face stronger regulation and reporting requirements, they are allowed to raise capital via the stock exchange.

8. Voluntary Sector • The voluntary sector (also known as the community sector) focus on helping and benefiting the public without thinking about making any profit out of it. For example some people choose to volunteer to work in some charities however they will not earn any money. • Three examples of organisations in the voluntary sector in Jamaica are: Missionaries of the Poor, Red Cross and United Way of Jamaica.

9. Voluntary Sector • The voluntary sector do not generate revenue for the workers as it is charities they choose to work for these organisations however do not earn an income. The money that they raise go towards their chosen charity, for example Food for the Poor raise money for assisting children and young adults.

10. Voluntary Sector • The voluntary sector is different from the other two sectors because it is ‘not-for-profit’ and is not government controlled. Traditionally, it has occupied a ‘third space’ and sits between the public and private sectors (another term for the voluntary sector is the third sector).

11. Voluntary Sector • The third space is one where needs have not been met because the private sector has not seen it as profitable to do so and the public sector has either neglected these needs or not been able to afford to address them.

12. Voluntary Sector • Few legal requirements in setting up the business. • Owner has complete control over the business. • Close contact with customers. • Incentive to work hard – do not have to share profits. • Secrecy of business matters.

13. Co-operatives • A cooperative is a private business organization that is owned and controlled by the people who use its products, supplies or services. Although cooperatives vary in type and membership size, all were formed to meet the specific objectives of members, and are structured to adapt to member's changing needs.

14. Co-operatives • Cooperatives are formed by individuals who coordinate among themselves (horizontal coordination) to achieve vertical integration in their business activities. • Although people have been working together for their mutual benefit throughout human history, the cooperative form of business organization began during the Industrial Revolution.

15. Co-operatives • Cooperatives were useful for promoting the interests of the less powerful members of society. Farmers, producers, workers, and consumers found that they could accomplish more collectively than they could individually.

16. Co-operatives • Groups of people who agree to work together and pool their resources. • All members have one vote. • All members help in running the business • Profits are shared equally among members. • Types: producer co-ops, retail co-ops, worker co-ops.

17. Public Corporations • Wholly owned by the state or central government. • Usually businesses that have been nationalised (sold by private individuals to the government). • The government appoints a Board of Directors to run the organisation. • The Board of Directors runs the organisation according to the objectives set by the government. • Eg of these in Jamaica are: Petro Jam, National Housing trust and Urban Development Corporations

18. Public Corporations: Objectives Traditionally, objectives of public corporations included: • To keep prices low so that everyone can afford the service. • To keep people in jobs. • To offer a service to all areas of the country. This often led to public corporations making huge losses, which had to be subsidised out of taxes.

19. Public Corporations: Objectives Today, the objectives have become: To reduce costs (this may include reducing the number of workers). To increase efficiency To close loss-making services (even if this means some consumers are not provided the service). This way of running public sector organisations is called corporatisation.

20. Reference ONLINE RESOURCES Entrepreneurship.org (2015) – Defining your business strategy{online} Available at: http://www.entrepreneurship.org/- accessed January 2016 Investopedia.com (2016)- Defintion Board of Directors {Online} Available at :http://www.investopedia.com/ - accessed January 2016 Wizznotes.com (2011)- Stakeholders And Their Role In Business Activities Available at: http://wizznotes.com/- accessed January 2016 Purpose of an organization - Sheila Margolis. (2018). Retrieved from https://sheilamargolis.com/core-culture-and-five-ps/the-five-ps-and-organizational-alignment/purpose/ LIBRARY RESOURCES Business Studies For You 2nd edition - David Needham and Robert Dransfield (Nelson Thornes) Pages 59-89

21. Reference Kammiri (2018). Private, public and voluntary sectors. [online] Slideshare.net. Available at: https://www.slideshare.net/AmalKammiri/private-public-and-voluntary-sectors [Accessed 25 Sep. 2018]. OpenLearn. (2018). Introducing the voluntary sector. [online] Available at: http://www.open.edu/openlearn/ocw/mod/oucontent/view.php?id=21012&section=1.1 [Accessed 25 Sep. 2018]. Resources, U. (2018). What is a Cooperative?. [online] Sfp.ucdavis.edu. Available at: http://sfp.ucdavis.edu/cooperatives/what_is/ [Accessed 25 Sep. 2018].