The individual can take all the profit from the organization, however they are responsible of any debt and losses because they have unlimited personal liability. In terms of starting up the business the sole owner has to finance it themselves. It is easy to set up as a sole trader but on the other hand there are some risks involved because you are liable for the business, responsible for the business so you are the one to blame if things go wrong. The purpose of a sole trader is to provide goods or services and get paid for it. Examples of sole trader businesses are small independent retailers, beauticians and internet entrepreneurs.
Private limited company LTD One of the most popular organizations, the private limited company with limited liability, whose shares are only transferable by direct contact and purchase from the shareholders for example by members of a family. Private limited companies tend to be owned by a small number of shareholders because they do not sell shares openly on any stock exchange. Such companies cannot sell shares to members of the public in order to raise more capital for the business. The number of shareholders can not exceed a fixed figure, usually around fifty.
The purpose of becoming a private limited many is usually that businesses want to keep their shares within their family members and close friends and by doing that they remain the control of the business. An example of a private limited company is Mars Family where all the shareholders are family members and friends. Public limited company Public limited company’s have shares that are traded on an official stock market and the shares can be bought and sold by anyone. A public limited company is usually owned by many investors while a private company is held by very few shareholders.
Public limited company is a type of company within he United Kingdom, Republic of Ireland and other English-speaking countries outside the united States, where “Inc. ” is used instead of PL. The advantage of the PL is that it often dominates the market because a large amount of finance that can be raised and it is always easy to borrow money from lenders due to the large size of company, which has many assets against which loans can be secured. When business becomes successful and a privet limited company wants to expand and make higher profits becoming a PL is an option.
Examples of public limited companies include Deco’s and Salisbury. Franchise Top of Formulator of Form I A franchise is an agreement by which a company, the franchiser allows the smaller firm the franchisee to trade services or goods under its brand name, as well as to use its strategies, business systems and processes. The franchiser gains rapid expansion and earnings at minimum cost with ongoing help in promotion and upgrading of the products or services. This is why franchisees have better chance to establish new business compared to the sole trader, who has to do everything from scratch with no help.
Examples of franchise companies are Subway, McDonald’s, 7-Eleven and Dunking’ Donuts. I Partnership A partnership company is owned by at least two and up to advent partners. Each partner contributes labor, money, property or skill and expect to share the profits and losses of the business. It is essential for the partners to discuss a wide variety of issues up front There are three types of partnerships. * General Partnerships Profit, liability and management duties are divided equally between partners. * Limited Partnerships Allows partners to have limited liability as well as limited inputs in management decisions.
The limits depend on each partners investment percentage. Joint Ventures Operating as a general partnership but for only a limited period of time or for a single project. To find a partner who has what you miss in your business, capital, expertise and other resources can be very beneficial for the organization. But it can also mean source of legal frustration and issues. Here are some interesting partnerships that to say the least succeeded. Figure 1 Larry Page and Sergey Bring (Google) Jobs and Steve Woozier (Apple Inc. ) Figure 2 Steve 1. Describe the extent to which an organization meets the objectives of different stakeholders.
Who are the stakeholders? No matter what kind of establishment, in the public or privet sector, whether they are profit or non profit organization have stakeholders. Stakeholders are the people or groups who have an interest in how the establishment performs because it affects them in some way so they have a stake in the organization. Usually the most important stakeholders are the people with most shares in a public listed company, owners of a business or the government in public service situation.
But with a more modern view is that there is a broader range of stakeholders and all interest of the stakeholders just be met in order for a establishment to be considered successful. From the illustration below you can see that stakeholders can be divided into two parts, internal and external stakeholders. Figure stakeholders in a company How do an organization meet the interest of different stakeholders? It’s not easy to pleas everyone in a organization, some stakeholders are more important than others.
Like the famous quote says in George Rowel’s Animal Farm, “All stakeholders are equal, but some stakeholders are more equal than others All enterprises are after success, to be the company people choose. In order to be that company businesses need to priorities stakeholders and every organization have they’re values and morals which resolves in the kind of decisions that they make for the company. Some leaders of a company may say that the most important stakeholders are the employees. Because without employees there is no organization and they treat the employees like the most important stakeholders.
So the employees get motivated and do better job from them, when they feel part of the company. Which resolves in better costumer service and which leads to more costumers, investors and company with more profit. Nevertheless there are some leaders who would suggest that the costumers are the biggest stakeholders. Because without the costumers there is no business and no need for employees, investors, suppliers or any other stakeholders. Like the grate Peter Trucker said that the only reason for a company’s existence is to create and serve customers .
In my opinion it would be grate if a company could satisfy both parts or all the stakeholders. But when it comes to critical leadership decisions some stakeholders have to come first place and think that there is no point for a business to exist without costumers. When a company demonstrates that it ally cares about the costumers need and by doing something unique that really matters to a growing market of loyal customers, investors get interested.
When investors see enthusiastic and excited customers they will follow and when they see customers living in flocks, investors will follow living the business bankrupt. . 3 Explain the responsibilities of an organization and strategies employed to meet them. What responsibilities do organizations have? Organizations operate in human society and like people they have to follow some rules. Some of this rules are law and others fall in to the category of ethics and morality. Here is an image of different responsibilities of organization. Social responsibilities Top of Formulator of Form I May be defined as the responsibility that the organization has towards the people and the environment in which the company operate.
For example universities and schools are expected to educate students whose abilities and qualifications will be beneficial to the whole society. Many organizations pursue different social and ethical objectives for example to provide job satisfaction for all employees, control pollution and to prevent health problems in the product sold. For example The Body Shop and Ben and Jerry has social objectives about the environment/ecology. Here is an example: “All businesses have greenhouse gas emissions associated with their operations – at Ben & Jerry, we have OUrs.
We rely on agriculture for our main ingredients; manufacturing to make our products; trucks to transport our finished products; and freezers to store our products. We know our footprint, are working throughout our operations to reduce it, and we report on progress annually. ” Environmental Responsibility Top of Formulator of Form I The concern of the environmental pollution as resulted in government action by law on environmental protection, waste disposal regulation There is law on environmental protection which is covered mainly in the Environmental protection Act 1997 and the water recourses act 1991.
This laws are made to minimize the release of pollution. Smaller businesses face different scale of environmental responsibility than large-scale enter price. Because the larger organizations produce larger volume of waste and pollution. Ethics & business Ethics is systematic study of how to behave in the right way and how we judge what is right. There is system called Coax ethics which is designed to help organizations to establish rules for ethical practice.
For example the first principle is the responsibility of business beyond shareholders toward stakeholders which states that “Business have a role to play in improving the lives of all their customers, employees and shareholders by sharing with them the wealth they have created. “( Bateman & Stair, 2006, p. 175 ) Legal responsibility Top of Formulator of Form I All organizations have to follow legal responsibilities and the law, which impact organizations planning process.
Here are some legal obligations that organizations need to follow as an employer: paying correct wages reimbursing your employees for work-related expenses ; safe working environ meet ensuring a not acting in a way that may seriously damage an employee’s reputation or cause mental distress or humiliation ; not acting in a way that damages the trust and confidence necessary for an employment relationship not providing a false or misleading reference I Public relations and corporate image Corporate image is what kind of picture the company sends out to the general public or the future customers.
The company can promote desired report image by combination of public relations advertising and experience and attitudes built up by customers over the years. Why would company’s want to build up a corporate image, there are different reasons. For example to strengthen customer loyalty, customer awareness, strengthen an employees attachment to the company or to prevent adverse publicity . For example Marks and Spencer grew up for many years with such good corporate image that they didn’t need any substantial PR or advertisement.
Management responsibilities Here are some examples of management responsibility towards: employees 2. Customers 3. Appliers 4. Competitors 5. Community There are some general principles that all organizations need to follow for example good pay and working conditions as well as good training and development schemes which should extent into, recruitment policy and redundancy and retirement policies. The restorability towards customers are mainly to provide a product or service of a quality that customers expect.
The relationship batwing the suppliers are mainly in term of training relationships, for example the organization should not delay payment to suppliers beyond the agreed credit time. There are some ethical responsibility n organization should have towards competitors as well as to the community such as, keeping the social and ethical values of the community. How do organizations meet this responsibilities ? The question company’s ask themselves are “Where can we provide value beyond our product and service? To be more social responsible company and to gain credibility.
It has become more and more popular for company’s to present themselves as for example environmental/ecological. The Body Shop claims to be one of the first global cosmetics companies to introduce bottles from 100% recycled plastic and their goal is to make all they’re PET bottles (30 lion) from this recycled plastic. On every Pound land bag it says that they are donating money this year to Macmillan cancer support. All of this methods are very good ways to present the company.
It gives an image of the company as not only being profit oriented but also carrying for the environment, society and our world. In the planning process organizations need to stet guidelines to govern their business’s practices according to the law for the environmental responsibilities in order to protect the company. In the bigger scale there was an attempt to control pollution on the Kyoto Treaty of 1997 by emission of” greenhouse asses” specially carbon dioxide which is linked with climate change.
The treaty is aim to reduce the emission of greenhouse gases in all Indus by around below their 1990 levels over the next decade. If it works? We will have to live and see,it was at least the first international agreement to try to reduce carbon emissions even thou the world’s biggest polluter US ( 36% emission) is not in the game. People are getting more and more aware of the green issues and company’s are finding terseness have to fit with the policies Of customers who are producing green products and it effects different sectors of industry.
For example people now are more aware of the sulfate in the shampoo and how it effects your hair and are now demanding shampoo with less or non sulfate and this has opened a market for new products which contain natural ingredients some of this products have started at home use for example Alkali Naturals Products or Naked Smooth which claim so contain 97% natural ingredients, you can find the latest one in every drugstore. When it comes to ethical responsibilities organizations should have an ethics committee which consists of internal and external directors, who make sure that the ethics and moral behaviors are beefing kept.
A company always have to deal with ethical issues because it operates in a people environment. For example people who work for the organization bring with them their personal beliefs, political opinions and upbringings and its always different from one person to other but you still have to make it work. Another example is in pharmaceutical industry where the product liability is a sensitive question. Companies are excited to get the new drug out there, benefit the community and make fast profit.
But on the other hand they are not suppose to rush thru their research on possible side-effects. That’s why in UK, the Consumer Protection Act 2007 covers this dilemma and pharmaceutical company’s need to follow this rules. But in cases when there is no law to follow organizations have to follow their own ethical dimension, asking is this Moral and legal? Immoral and legal? Moral but illegal? Immoral and illegal? Here is an example of how company is managing its responsibilities towards its employees and customers. Following is a code used by United Biscuits.
To achieve the dynamic morale and team spirit based on mutual confidence without which a business cannot be successful, people have to be cared for ruing their working lives and in retirement. We respect the rights and innate worth of the individual. The company encourages all Figure united Biscuits in Manchester factory Figure jointed Biscuits in Manchester factory employees to be trained and developed to achieve their full potential. ” ” Both employees and customers need to know that products sold by any of our operating companies will always meet their highest expectations.
We will never compromise on recipes or specification of products in order to save costs. Quality improvement must always be our goal. ” Organizations are also allowing some law of fair training monopolies, mergers and anti- competitive practices. When a organization acts responsibly it gains trust of communities, respect from government and the public and loyalty from customers. All stakeholders benefit and it gives the organizations advantage when recruiting new stuff, people want to be part in that organization.
When a company is known to be good at what they do there is no need of PR and advertising, people know and they want the organization to be there like the Rich Dad Company or Dundee Muffling, successful businesses with less or no advertisement or PR. 2. Outline the nature of the national environment in which business operates. 2. 1 Explain how economic systems attempt to allocate resources effectively. Nations just like people have to make choices on what to produce and to figure this out they have to answer three questions.
What goods and services should be produced? 2. How should this goods and services be produced? 3. Who will get the goods and services? When a country has answered this three basic questions, rules are build which are the platform for an economic system. What economical systems are there? Different economical systems 1. Traditional . Command 3. Free Market 4. Mixed Market There are four Traditional economy Is based on tradition, long-established patterns of what to produce, how to produce it and how to exchange resources.
It is usually agricultural and hunting societies. In this kind of societies there is very little or no room for innovation or change, the living standard is always low. While the economical aspect, behaviors and relationships are predictable and “safe”. The individual don’t have so much to say and is expected to share equally in the proceeds of their labor. This system is still in process in some underdeveloped entries such as Belabors, Eskimos and Indian tribes. In the past when it was farming and hunting times you could have found it everywhere in the world.