Types of Organisation
What is a sole trader?
A business owned and run by one person.
Who is a stakeholder
Anyone with an interest in or affected by the business (e.g., employees, customers, owners).
What is a business aim?
A broad, long-term goal (e.g., growth, survival).
What does the HR department do?
Manages recruitment, training, employee welfare, and performance.
What is a power culture?
Decisions are made by a central figure; strong control but can limit innovation.
What is the difference between limited and unlimited liability?
With limited liability, owners (like shareholders) are only responsible for business debts up to the amount of their investment, protecting their personal assets from creditors. With unlimited liability, owners are personally responsible for all business debts, and their personal assets (like a house or savings) can be seized to pay them off if the business fails
Name two internal stakeholders.
Employees and managers
What’s the difference between an aim and an objective?
Aims are general goals; objectives are specific, measurable steps to achieve them.
How do marketing and operations work together?
Marketing identifies customer needs; operations deliver products/services to meet them.
What is a role culture?
Structured around roles and rules; stable but can be rigid.
What type of organisation is owned by shareholders and traded on the stock exchange?
A public limited company (PLC).
Name one way customers influence a business.
Through buying choices, feedback, and demand for products/services.
Why might a social enterprise have different objectives than a PLC?
Social enterprises focus on social impact; PLCs focus on profit and shareholder value.
What does the finance function do?
Manages budgets, cash flow, and financial reporting.
What is a task culture?
Focused on teamwork and solving problems; flexible and dynamic.
What’s the difference between the public and private sector?
Public sector is government-funded and serves society; private sector is profit-driven and privately owned.
How can employees affect business decisions?
Through performance, suggestions, or industrial action.
Why do objectives change as a business grows?
Priorities shift (e.g., from survival to expansion or innovation)
How do operations and customer service link together?
Good operations ensure product/service quality; customer service handles feedback and support.
What is a person culture?
Individuals are central; common in professional firms; can lack direction.
A tech startup wants to grow quickly, attract investors, and eventually trade shares on the stock market. Which type of organisation would be most suitable, and why might other types be less appropriate?
Public Limited Company (PLC) — because it allows share trading on the stock market and access to large-scale investment.
Other types like sole trader or partnership are less suitable due to limited growth potential and funding options.
Private limited companies (Ltd) can grow but don’t trade shares publicly.
What might cause conflict between stakeholders?
Different priorities, e.g., shareholders want profit, employees want better pay
Can a business have conflicting objectives? Give an example.
Yes. E.g., cutting costs vs improving quality
What happens if departments don’t communicate well?
Mistakes, delays, poor customer experience, and reduced efficiency.
Which culture is best for innovation? Why?
Task culture—encourages collaboration, creativity, and adaptability.