Btec Hnd Business Environment
Task 1
1.1
Organisations can be classified in terms of their business purpose, ‘for profit’ or ‘not for profit’ organisations. Organisations that seek to make a profit are mainly private sector businesses which provide goods/services and must make a profit to survive. They can break even or even make a loss for a very short time or they will cease to exist.
The main structure of profit seeking organisations includes: 1. SOLE TRADER. Business owned by a single person, bearing full responsibility of financing and the burden of any debts of the business. The purpose of its existence is to sell goods/services with a view to make a profit out of the transaction. 2. PARTNERSHIPS. Business owned by two or more people. The purpose of a partnership is to share the burden of raising finance and the debts of the business as well as the profits generated by the sale of goods/services. Partnerships also enable the owners to share skills and knowledge required to run the business. 3. COMPANIES. Private and Public Limited companies have their own legal identity separate from its owners. They provide goods/services and seek to make a profit and maximise the wealth its owners/shareholders. These are mainly larger organisations than sole traders and partnerships, and may have more stakeholders, depending on how large they are. The survival of the large organisations does not depend solely on making a profit but on other factors as well such as public perception. They aim to be socially responsible and take into account the environmental impact of their business operations. Large organisations also seek to increase their market share as well as seeking to increase shareholder wealth.
Not-for-profit organisations are mainly public sector and voluntary sector organisations.
Public sector organisations are state owned and provide essential goods /services free of charge or below cost price such as the NHS. They provide public goods and merit goods which the private
1.1
Organisations can be classified in terms of their business purpose, ‘for profit’ or ‘not for profit’ organisations. Organisations that seek to make a profit are mainly private sector businesses which provide goods/services and must make a profit to survive. They can break even or even make a loss for a very short time or they will cease to exist.
The main structure of profit seeking organisations includes: 1. SOLE TRADER. Business owned by a single person, bearing full responsibility of financing and the burden of any debts of the business. The purpose of its existence is to sell goods/services with a view to make a profit out of the transaction. 2. PARTNERSHIPS. Business owned by two or more people. The purpose of a partnership is to share the burden of raising finance and the debts of the business as well as the profits generated by the sale of goods/services. Partnerships also enable the owners to share skills and knowledge required to run the business. 3. COMPANIES. Private and Public Limited companies have their own legal identity separate from its owners. They provide goods/services and seek to make a profit and maximise the wealth its owners/shareholders. These are mainly larger organisations than sole traders and partnerships, and may have more stakeholders, depending on how large they are. The survival of the large organisations does not depend solely on making a profit but on other factors as well such as public perception. They aim to be socially responsible and take into account the environmental impact of their business operations. Large organisations also seek to increase their market share as well as seeking to increase shareholder wealth.
Not-for-profit organisations are mainly public sector and voluntary sector organisations.
Public sector organisations are state owned and provide essential goods /services free of charge or below cost price such as the NHS. They provide public goods and merit goods which the private