Different Types of Business Organisation
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There are three main types of businesses or organizations: public sector, private sector, and voluntary sector. The public sector is owned and run by the government to provide essential services to the public, such as health, education, and infrastructure. It is funded by taxpayer money. The private sector consists of for-profit businesses owned and run by individuals or shareholders, with goals of profit and growth. The voluntary sector includes non-profit organizations like charities that aim to help particular groups through fundraising and donations.
Different Types of Business Organisation
- 1. Who Is Involved In Business Activity?
- 2. Since different businesses attempt to do different things, different types of people are responsible for starting them in the first place. In all, 3 main types of businesses (organisations) need to be considered. These are: Public Sector Organisations Private Sector Organisations Voluntary Sector Organisations (eg Charities)
- 4. Public Sector – is owned and run by the state (Government) for the people. People pay taxes to the Government and this money is used to finance most of the public sector. AIMS:- To provide essential public services To use resources well for the benefit of the community
- 5. The 2 most important parts of the State are:- Central Government Local Government
- 6. CENTRAL GOVERNMENT (London/Parliament) Defence National Health Service Social Security Prisons Police Roads Universities
- 7. LOCAL GOVERNMENT (eg East Lothian) Primary & Secondary Education Refuse Collection Libraries Social Services Council Housing Roads Parks and Sports Facilities
- 8. The Public Sector is a Provider Producer Buyer PROVIDER The Public Sector in the UK provides a large range of services. Part is provided free of charge to consumers (like School) and prices are charged for others, eg entrance fees to swimming pools and sports facilities.
- 9. PRODUCER The Public Sector produces some of the goods and services like education and health care. BUYER The Public Sector buys in products to help it provide various services, eg tanks (defence), road building services, equipment for parks etc
- 10. PUBLIC CORPORATIONS These are companies that are owned by central government. A government minister appoints a chairperson and board of directors to run the company on the governments behalf. Public corporations include the BBC and Royal Mail . Public corporations receive grants from the government and also raise finance from the public. The BBC charges the public for a TV licence.
- 12. Private Sector Businesses are owned and run by private individuals. Examples of Private Sector businesses are: Sole Traders Partnerships Companies (Private and Public) Franchises AIMS: Profit Increased market share Growth Maximise Sales
- 13. Where can private sector businesses get finance? Sole Traders & Partnerships Personal Savings Bank Loans Government Grants Trade Credit Sole Traders could form a partnership Companies Sell Shares in the company
- 14. Voluntary Groups
- 15. OWNERSHIP Voluntary groups are not owned by any individual people. However, someone will be responsible for ensuring that it sets targets and budgets and does what it is set up to do.
- 16. PURPOSE In most instances they try to help particular types of people, eg guide dogs for the blind, Oxfam etc
- 17. SURVIVAL In order to survive they normally must at least break-even (ie spend no more than they take in through fundraising , grants and donations etc)