Understanding the Organisational Purposes of Businesses

Topics: Government, Stakeholder, Stakeholder analysis Pages: 5 (1546 words) Published: June 21, 2012
Course Name: Level 4 HNC Business

UNIT TITLE NO. AND TITLE: Unit 1 Business Environment

Assignment No. and title:
Assignment 1- Understanding the organisational purposes of businesses (DRAFT)

Date Submitted 21st May 2012

Understanding the organisational purposes of business
In this day and age all individuals will have some affiliation with a business organisation. Whether it be the company they work for, the retail store they purchase their groceries or the NHS dentist they attend individuals of society are all affiliated, controlled and in control of business organisation. Organisations may be established for a number of reasons and serve various purposes, their activities can be affected by a range of different individuals and groups. These may be individuals from within and organisation or groups operating externally. In order for them to operate effectively and legally they must take into account responsibilities they have and act accordingly. Organisation

An organisation can take shape in many forms it can be a single person or a group of people, they can be large scale national organisations like the BBC or Tesco to small local business like hairdressers or coffee shops. “"Organisation may be defined as a group of individuals, large of small, that is cooperating under the direction of executive leadership in accomplishment of certain common object."(Keith Davis 1997) The purpose of an organisation will depend upon the nature of its business. They can be formed for various reasons and serve numerous purposes, they can be large or small, local to international. Each organisation will serve their own purpose and will have their own aspirations and achievements. Organisations nationally can be generalised under one of four main categories, which are as follows; •Private sector

Public sector
The private sector can be seen as organisations owned by individuals for individual interest. Under this category would be sole traders, partnerships, companies, franchises or cooperatives. Their main objectives are too providing a service and turn a profit. Although these organisations are owned privately and their profits are their own, the way in which they operate can be hugely dictated through government legislations. Public sector organisations owned by the government or government controlled bodies for collective interest. This can be public corporations, government shareholdings, quangos or other government controlled organisations. They are set up through an act of parliament reasons for establishment can differ it could be to gain benefits of large scale productions, or to protect employment in areas of high unemployment. Although they have profit orientated organisations, unlike the private sector they also have none profit orientated organisations such as the NHS which are set up primarily to provide free service to the nation. Charitable organisations are set up to raise funds or support for other people or a course. Their aim is to raise enough funds or a surplus to use for helping others. Once they have raised enough funds to cover their costs all profits will be donated to helping others. This is in contrast to the profit based objectives of the private sector. An organisation may come in many forms so whether it is a sole trader or large scale company created to provide service and turn profit, or government organisations like the BBC or Bank of England established to serve the nation. To Oxfam and Water Aid, charities set up to raise funds to help others. One element that can affect all organisations is the environment in which they operate the individuals and groups that they can affect and in turn be affected by their activities . Stakeholders

Stakeholders in an organisation can have great influence in the way in which they are run. A stakeholder is defined as “any individual who can affect or is affected by the achievement of the firms’ objectives” (Freeman...

References: Davis K. 1997.Organisational Behaviour: a book of readings, Ed 5, McGraw-Hill Publishing
Freeman R E. 1984.Strategic Management a Stakeholder Approach, Pitman Publishing
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