The Purposes Of Different Types Of Organisations Commerce Essay

An organisation is a formal structure of relationships, responsibilities and authorities through which specific objectives are achieved.

‘A work organisation is a social arrangement for the controlled performance of collective goals’ (Buchanan and Huczynski, 2004).

Purposes of different types of Organisation:

Business organisations: To make a profit in a socially standard way.

For example: Airlines, Fast food.

Non-profit service organisations: They want to help to all of people without any profit.

For example: NHS, Universities.

Mutual-benefit organisations: Individuals join together to pursue their own self-interest.

For example: Clubs, Trade Union.

Commonweal organisations: They provide service to all members of a given population.

For example: Fire Service, Police.

Organisations by their intended purpose:

Purpose

Primary beneficiary

Examples

Business

Owners

Manufacturers, Fast-food, Restaurants

Non profit services

Clients

Universities, Hospitals

Mutual-benefit

Members

Unions, Clubs

Commonweal

Public at large

Police, Public schools

Classifying Organizations:

Sector classification:

Private enterprise organisations: A “private sector” organisation is one that is owned and controlled by private individuals, not the government and usually exists to make a profit for its shareholders.

Public sector organisations: A “public sector” organisation is one that is controlled by the government. It is called “public” because the government is responsible to the entire public.

Commercial interest classification:

Profit oriented: Profit-oriented means pricing strategies rely on setting a product or service’s price to attain a specific, programmed net profit percentage.

Non-profit oriented: In the broadest sense, an organisation in which no part of any net earnings can grow for the benefit of any private shareholder or individual.

Size oriented classification:

Large scale: To access the large-scale data sources efficiently and automatically, it is necessary to classify these data sources into different domains and categories.

Medium scale: The demands on an intensely-managed landscape need a regional landscape planning system, which balances the social economic needs with geo-biological conditions.

Small scale: Title for firms of a certain size which fall below certain criteria in terms of annual income, number of employees, total value of assets.

Formal and Informal Organization:

The Formal organization is-

Deliberately planned and created.

Concerned with the co-ordination of activities,

Hierarchically structured with stated objectives, the specification of tasks and defined relationships of authority and responsibility.

The Informal organisation is-

Is flexible and loosely structured,

Relationships may be left undefined,

Membership is spontaneous and with varying degrees of involvement.

Describe the extent to which an organisation meets the objectives of different stakeholders. [P2]

Stakeholders:

A shareholder is a stakeholder simply because he or she has spent money in a company. Therefore, those people remain for to see a good return on the investment. This may not only consist of the value of the stock increasing over time, but it may also include getting periodical dividend payments based on profitability.

Organisational objectives:

Objectives are defined as specific commitment to complete a measurable result within a given time frame.

Importance of objectives:

Targets,

Measuring sticks,

Commitment and

Motivation.

Characteristics of objectives:

Organisational purpose and aims,

Be realistic,

Be measurable,

Preferably be set by agreement,

Set clear and challenging targets,

Be open to adaptation,

Form a network.

Objectives of different Stakeholders:

Owners: In a company it would be the shareholders. Owners are often thought to be the most important stakeholders because they have set up the business and give a lot of time into the company to make it successful. Owners like to see their share of profit increasing, and the value of their business increasing.

Customers: Customers want superiority for money which involves providing the highest quality products at rival prices.

Employees: Their stake is that the company provides them with am livelihood. They want security of employments, good rates of reward and also improvement opportunities.

Suppliers: They want to feel valued by the company and want frequent orders with on time payments.

Trade Unions: This is for groups of employees who seek to secure higher wages and better working conditions for their members.

Governments: The government wants businesses to become successful, to create jobs and to pay taxes.

Inducements and contribution of inside stakeholders:

Stakeholders

Contribution of the organisation

Inducement to contribute

Shareholders

Money & capital

Dividends

Managers

Skills & expertise

Salaries, bonuses, status & power

Workforce

Skills & expertise

Wages, bonuses, stable employment & promotion

Inducements & contributions of outside stakeholders:

Stakeholder

Contribution to the organization

Inducement to contribute

Customers

Revenue from purchase of goods and services

Quality and price of goods and services

Government

High quality inputs

Revenue from purchase of inputs

Unions

Free and fair collective bargaining

Equitable share of inducements

Community

Social and economic infrastructure

Revenue, taxes and employment

General public

Customer loyalty and reputation

National pride

Explain the responsibilities of an organisation and strategies employed to meet them. [P3]

Responsibilities of an Organisation:

Responsibilities are the most important thing in this topic. Because of an organisation have a plan. So, to success plan, they must be maintaining some responsibilities. The main aim of the research is to give a formal analysis of the relations between collective obligations to individual responsibilities. Which individual agent in a group should be held responsible if an obligation directed to the whole group is not fulfilled?

To this aim, concepts from planning fiction (like plan and task allocation) and organization theory are used in order to conceptualize collective agency and the organizational structures. These concepts are formalized in a dynamic demonic logic framework, which allows us to study the connections between all these concepts.

I give a formal account of the notion of coordination, power and controls intended as management of interdependencies among agents’ activities and show how these organizational relations together with specific task breakdown determine the responsibilities within an organization.

For example:

CSR (Corporate social responsibility) is an organization’s moral responsibility to stakeholder groups that are affected directly or indirectly by the organization’s actions. An organization can adopt a narrow or a broad stance on social responsibility.

Strategies:

Once clear targets have been identified, a set of strategies must be decided on to further the organisation’s efforts. Strategies are defined here as specific programs, initiatives, and decisions which will require resources allocated to them. They can range from the development of Strategies alliances to developing and conveyance special in-house training for customer service. These operating Strategies are usually very special given that the good plans are very clear and focused.

Frequently, there may be some Strategies that are critical and yet don’t get openly shared, particularly since they may be really sensitive and general knowledge of them would put you at a competitive weakness.

The Strategies document the approach that will be used to meet the performance goals. They are generated by middle management and approved by top management. Every effort should be made to keep the Strategies up to date, without making major changes. Major change can also result in the termination of projects that are only partially completed and/or have not become totally effective. It should be apparent that many Strategies are generated by many different functions, supporting the business objectives.

Explain how economic systems attempt to allocate resources effectively. [P4]

Economics:

”Economic is a social science that studies human behaviour as a relationship between ends and scarce means which have alternative uses. That is, economic is the study of the trade-offs involved when choosing between alternate sets of decisions”. (Lionel Robbins, 1935)

The purpose of economic activity:

It is openly said that the central purpose of economic activity is the production of goods and service to satisfy consumer’s needs want i.e. to meet people need for consumption both as a means of survival but also to meet their ever-growing demand for an improved lifestyle or standard of living.

What goods and service to produce: Does the economic uses its resources to operate more hospitals or hotels? Do we make ipod Nanos or produce more coffee?

How best to produce goods and service: What is the best use of our scarce resources of land labour and capital? Should school playing fields be sold off to provide more land for affordable housing?

Who is to receive goods and service: What is the best method of distributing products or ensure the highest level of wants and needs are met? Who will get expensive hospital treatment-and who not?

Economic Systems:

”An economic system is best described as a network of organisations used by a society to resolve the basic problem of what, how and for whom to produce”.

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Categories of economic system:

Traditional Economy: Where decision about what, how and for whom to produce are based on custom and tradition.

Free market economy: Where households own resources and free markets allocate resources through the workings of the price mechanism.

Planned or command economy:  In a planned or command system typically associated with a socialist or communist economic system.

Mixed economy: In a mixed economy, some resources are owned by the public sector (government) and some resources are owned by the private sector.

Sectors of production in the economy:

Primary sector: This involves extraction of natural resources e.g. agriculture, forestry, fishing, quarrying, and mining.

Secondary sector: This involves the production of goods in the economy, i.e. transforming materials produced by the primary sector e.g. manufacturing and the construction industry.

Tertiary sector: the tertiary sector provided services such as banking, finance, insurance, retail, education and travel and tourism.

Quaternary sector: The quaternary sector is involved with information processing e.g. education, research and development.

Meaning of economic scarcity: Scarcity is the fundamental economic problem, in a world of limited resources. Society has insufficient productive resources to fulfil all human wants and needs.

For example:

Flowers such as tulips are scarce on occasion because they grow only at certain time of the year. When they supply of tulips is lower, they are scarce, or not always available. If enough people want tulips when none are available, then the demand increases. And this demand is high not because the price is high but because the supply is low.

Criteria for Allocation:

Appropriate means of resource allocation are necessary to achieve optimal allocation of the resource. There are several criteria used to compare of water allocation @owe aelt, 1986.

Flexibility in the allocation of existing supplies, so that resource can be shifted from use to use, place, as demand change, thus allowing equating marginal values over many uses.

Predictability of the allocation process, so that uncertainty (especially for transaction costs) is minimized.

Equity of the allocation process should be perceived by the prospective users, providing equal opportunity gains from the resource to every potential user.

Political and public acceptability, so that the allocation serves values and objectives of various segments in society.

Allocate resources effectively:

The business plan plays a key role in allocating resources throughout a business so that the objectives set in the plan can be met.

Once you have reviewed our progress to date and identified our strategy for growth, our existing business plan may look dated and may no longer reflect our business’ position and future direction.

When we are reviewing our business plan to cover the next stages, it’s important to be clear on how we will allocate our resources to make our strategy work.

The allocation of scare resources:

Allocation of scarce resources is a reality for health care professionals and organizations. Resource allocation issues can be particularly challenging for rural communities, where resources are not enough to meet all needs and fewer alternatives exist to resolve conflicts between competing needs.

Flexibility

Security

Real opportunity cost

Predictability

Equity

Political and public acceptability

Assess the impact of fiscal and monetary policy on business organisations and their activities. [P5]

Fiscal policy:

Fiscal policy is the means by which a government adjusts its levels of spending in order to monitor and influence a nation’s economy. It is the sister strategy to monetary policy with which a central bank influences a nation’s money supply. These two policies are used in various combinations in an effort to direct a country’s economic goals.

How Fiscal policy works?

Objectives of fiscal policy:

To fund government spending

To redistribute income and wealth more evenly

A way of managing demand in the economy

To influence the supply side of the economy

To correct the negative externalities, such as pollution and passive smoking

Effects of fiscal policy:

Taxation and work incentives

Taxation and pattern of demand

Taxation and productivity

Taxation and business investment decision

What is monetary policy?

The Federal Reserve’s actions that are designed to influence the availability cost of money. Such as changing the discount rate, altering bank reserve requirements, and conducting open market operations. In general, a policy to restrict monetary growth results in tightened credit conditions and, at least temporarily, higher rates of interest.

Impact of monetary policy:

Control inflation: The control of inflation has become one of the dominant objectives of government economic policy in many countries.

Interest rates: The price of money. Interest is what you pay when you borrow money and what you are paid when you lend your money to someone else, like a bank.

Business cycles: The term business cycle refers to economy-wide fluctuations in production or economic activity over a number of months or years.

Spending: Money that has actually left the government’s bank account and entered the economy.

Employment: The act of giving someone a job.

Fiscal & Monetary policy’s activities:

The role of government in the UK economy extends far beyond its activities as a regulator of specific industries. The government also manages the overall pace of economic activity, seeking to maintain high levels of employment and stable prices. It has two main tools for achieving these objectives: fiscal policy, through which it determines the appropriate level of taxes and spending; and monetary policy, through which it manages the supply of money.

Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation. [P6]