Unit 1: Types of Organizations & Business Growth

**1. Types of Organizations** - **Private Sector vs. Public Sector:** - **Private Sector:** Owned by individuals or shareholders (e.g., sole traders, partnerships, companies). - **Public Sector:** Owned by the government (e.g., nationalized industries, public hospita...

**1. Types of Organizations** - **Private Sector vs. Public Sector:** - **Private Sector:** Owned by individuals or shareholders (e.g., sole traders, partnerships, companies). - **Public Sector:** Owned by the government (e.g., nationalized industries, public hospitals). - **For-profit Organizations:** - **Sole Trader:** Single owner. Pros: full control, easy setup. Cons: unlimited liability. - **Partnership:** Owned by two or more people. Pros: shared resources. Cons: unlimited liability. - **Companies (Private and Public Limited Companies):** Separate legal entity, limited liability for shareholders. Public companies can sell shares on stock exchanges. - **Non-profit and Non-governmental Organizations (NGOs):** - Organizations that operate for social, environmental, or humanitarian purposes rather than profit (e.g., charities, foundations). **2. Business Objectives** - **Mission Statement vs. Vision Statement:** - **Mission Statement:** Defines the company's purpose and primary objectives. - **Vision Statement:** Outlines long-term aspirations and where the business aims to be in the future. - **Corporate Social Responsibility (CSR):** - Businesses' obligation to act ethically and contribute positively to society (e.g., environmental sustainability, fair labor practices). - **SMART Objectives:** - Goals that are **Specific**, **Measurable**, **Achievable**, **Relevant**, and **Time-bound**. **3. Stakeholders** - **Internal Stakeholders:** Employees, managers, owners/shareholders. - **External Stakeholders:** Customers, suppliers, governments, pressure groups, and the community. **4. Business Growth and Evolution** - **Economies of Scale:** As businesses grow, they benefit from lower average costs due to factors like bulk buying, specialization, and improved technology. - **Internal Economies of Scale:** Achieved within the company (e.g., increased efficiency through better production methods). - **External Economies of Scale:** Occur when the industry itself grows, benefiting all businesses in the sector. - **Diseconomies of Scale:** When growth leads to inefficiencies (e.g., communication problems, loss of control). **6. Organizational Planning Tools** - **SWOT Analysis:** Identifies a business's **Strengths**, **Weaknesses**, **Opportunities**, and **Threats**. - **Strengths/Weaknesses:** Internal factors (e.g., brand reputation, financial resources). - **Opportunities/Threats:** External factors (e.g., new markets, competition). **8. Business Sectors** - **Primary Sector:** Extraction of raw materials (e.g., mining, agriculture). - **Secondary Sector:** Manufacturing and processing (e.g., factories producing goods). - **Tertiary Sector:** Services (e.g., banking, retail). - **Quaternary Sector:** Knowledge-based services (e.g., IT, research). **9. Entrepreneurial Motives and Characteristics** - **Entrepreneurial Motives:** Financial gain, independence, social goals, innovation. - **Entrepreneurial Characteristics:** Risk-taking, leadership, creativity, resilience. **10. Forms of Expansion and Growth** - **Franchising:** A business model where a company allows another party to use its brand, products, and business model in exchange for fees or royalties. - **Joint Ventures and Strategic Alliances:** Two companies collaborating to achieve shared goals without merging completely.