Types of Organizations 1
A non profit social enterprise that provides voluntary support for good causes
What is a Charity?
A restriction on the amount of money that owners can lose if their business goes bankrupt, ie, shareholders cannot lose more then they invested in the company
What is limited liability?
When a business benefits from lower unit costs of production by operating on a larger scale? Lower costs give the firm a price advantage
What are economies of scale?
A form of external growth where two(or more) firms agree to form a new organization, thereby losing their original identities
What is a merger?
Shows the course a product takes through its different stages in the market
What is The product life cycle?
A for profit social enterprise set up, owned and run by their members, who might be employees and/or customers
What is a cooperative?
A type of private sector business owned by 2-20 people. They share the responsibilities and burdens of running and owning the business
What is a partnership?
The strategy involved in selling new products in new markets to spread its risks. It can enable the firm to gain revenue from an untapped market despite being a potentially high risk strategy
What is diversification?
Similar to a joint venture in that firms share costs. However, unlike JVs, the affiliated businesses remain independent organizations. A collaboration where no new business is created
What is a strategic alliance?
This stage of PLC shows a steady drop in sales and through this the profits of a product.
What is the decline stage of PLC?
A business that is owned by shareholders. It has been issues a certificate of incorporation, giving it a separate legal identity to its owners
What is a company or corporation?
An incorporated business that allows the general public to buy and sell shares in the company via a stock exchange. All shareholders enjoy limited liability.
What is a public limited company?
Offering products that have a unique advantage that makes it stand out from other products that are available in the market
What is USP(unique selling point)?
The gradual expansion of a business from within
What is internal or organic growth?
At this stage of PLC sales continue to rise but do so slowly. The product is well established.
What is maturity stage of PLC?
A legal contract signed by the owners of a partnership. The formal deeds specify the name and responsibilities of each partner and their share of any profits or losses.
What is a deed of partnership?
A feature of sole traders and ordinary partnerships who are legally liable for all monies owed to their creditors, even if this means that they have to sell their personal possessions to pay for their debts
What is unlimited liability?
The cost disadvantages of growth where unit costs are likely to rise as a firm grows due to lack of control, coordination and communication
What are diseconomies of scale?
MNC
What is the abbreviation for Multinational company?
Ansoff matrix strategy that occurs when a business grows by increasing its market share. Selling more of its existing products in the same market
What is market penetration?
Occurs when a business sells all or part of its business to shareholders on a stock exchange for the first time
What is an initial public offering(IPO)?
Funds or money paid out to shareholders as a portion of company profits
What are dividends?
A growth strategy that combines the contributions and responsibilities of two different organizations in a shared project by forming a separate legal entity
What is a joint venture?
When two businesses in unrelated lines of business integrate. This type of integration is also known as diversification and occurs for many reasons but mainly to reduce overall corporate risk.
What is a Conglomeration?
The riskiest growth strategy a business can pursue. Introducing a new product into a new market
What is diversification?