G041: Lecture 02 Types of Organisations Mr C Johnston ICT Teacher www.computechedu.co.uk

Session Objectives Understand main types of organisation, Understand that organisations have several characteristics, Know different types of organisational ownership, Know different ways in which organisations can be categorised depending on their business activities, Understand that organisations have a structure, Know the different ways in which organisations are financed.

What Is An Organisation? An can be broadly defined as: “Any individual or more commonly, any group of individuals, working in a structured way to accomplish specified tasks or results”.

Main Types of Organisation There are three main types of organisation: Commercial Organisation E.G Tesco Public Service Organisation E.G Sidney Stringer School Charitable Organisation E.G Save The children

Commercial Organisations Commercial organisations or “companies” have several characteristics we need to consider when analysing them: Who their customers are, Who owns them, What their mode of operation is, What form their organisational structure takes, How they are financed.

Customers Customers are the essence of the business carried out by any company, The population of customers built up by the company is called its customer base, Size and suitability of a companies customer base can determine the health of an organisation, Customers could be known as other names such as Clients or patients, Customers could consist of individuals and other companies.

Ownership Sole Traders Partnerships Limited Companies One single owner who takes all the risk Partnerships Two or more people who split the risk Limited Companies Companies issue shares to shareholders Only responsible for the value of your shares LTD Private Limited Company PLC Public Limited Company

Mode of Operation There are 4 sectors which organisations are said to trade in: Primary Sector Acquiring Natural Resources Secondary Sector Add value to natural resources or to products which have been derived from natural resources Tertiary Sector Provide a service Quaternary Sector Provide information based services

Organisational Structure Every organisation needs a structure else there would be chaos, A diagram of an organisation’s structure is important as it illustrates the chain of command, Structure diagrams also indicate who is responsible for what within the organisation, Companies with lots of levels are known to have hierarchical structure, Those with few levels are known to have a flat structure.

Sources of Finance The main two sources of finance for a company are: Shareholders funds Loan money Mature companies find raising capital easier as they have a trading record, There are “venture capital companies” who specialise in assisting young companies.

Examples of UK Organisations Exercise Create the following table: Examples of UK Organisations Organisation Name Organisation Type Ownership Type Operation Type(s) Include as many companies as you can think of in you table. Try and include a good variety of ownership and operation types. You will have to use the internet to find out the ownership of each company, perhaps the companies website will tell you this.

Exercise – Further Reading Company Information http://uk.finance.yahoo.com/ http://news.bbc.co.uk/1/hi/business/companies/default.stm Business Ownership http://www.goffs.herts.sch.uk/website/ks4bus/TypesofBusinessOwnership_files/frame.htm Industry Classification http://www.bennett.karoo.net/topics/industrytheory.html http://www.digitalbrain.com/digitalbrain/web/subjects/2.%20secondary/ks3geo/su13/mod13a/exercise1.db_psc?verb=view

Exam Question…. Most schools and colleges are examples of public service organisations. a) Describe what is meant by a public service organisation. [2] b) Give two other examples of public service organisations. [2] c) Give one example of a type of commercial organisation and describe the service it provides. [3]

Exam Question Answers… Most schools and colleges are examples of public service organisations. a) Describe what is meant by a public service organisation. [2] an organisation that is funded/managed/controlled (1) by the government (1) through taxes (1) b) Give two other examples of public service organisations. [2] Any two recognisable and distinctive public services organisation such as: hospitals / NHS, Libraries, emergency services (police/fire brigade/ ambulance). c) Give one example of a type of commercial organisation and describe the service it provides. [3] Any one type of commercial organisation identified and services described eg Banks/building societies (1st) provide financial services (1) hold accounts (1) lend money (1) provide mortgages (1) Shops (1st) provide retail services (1) sell goods to general public (1) display goods for sale (1) provide delivery services (1)