Types of organisations!!

Types of private sector businesses?

• Sole trader

• Partnership

• Private limited company (LTD)

• Public limited company (PLC)

• Multinational

• Franchise

Features of LTD organisations?

• Owned by shareholders

• Controlled by a board of directors

• Invited to buy shares

• One shareholders to register

• Shareholders have limited liability

Features of PLC organisations?

• Owned by shareholders

• Controlled by a board of directors

• Sells shares on stock market

• Minimun of two shareholders to register

• Shareholders have limited liability

What is a multinational?

A multinational organisation is a company which has its headquarters in one country but has assembly or production facilities in other countries

Advantages of multinationals

• It creates jobs

  • This boosts the local economy and employs more workers who will contribute tax.

• Benefiting from economies of scale

  • This means that there is reduced cost so increased profit that can be re-invested into the business.

• Larger market

  • This allows the business to sell to more consumers which will allow the business to increase profit and sales

• The business will have an enhanced reputation

  • This allows the business to gain loyal customers

Disadvantages of multinationals?

• Transportation is expensive

  • This means that their is increased costs so the business have less profit to re-invest

• Difficult to control in many countries

  • This may mean that problems may be missed which lead to dissatisfied customers

• Legislation differs in some countries

  • This prevents the business from opportunities that may enhance their business and that will attract customers

• Cultural variations on certain products

  • This means that products in certain countries may be unpopular which will affect production and sales

What is a franchise?

A franchise is a method of setting up a business which involves two parties; a franchiser and a franchisee

What is a franchiser?

Owns the trading name

What is a franchisee?

Runs the business

Advantages for the franchiser?

• Allows growth for the brand

  • This means the brand can attract more customers without the trouble or expense of opening new branches

• It reduces competition

  • This means that the business will have greater sales so more revenue which can be re-invested into the business

• Reduces risk

  • This is because the risk of failure is shared with the franchisee

• Regular funds from ongoing franchisee profit payments

  • This means that that the franchiser has more revenue to reinvest into the business

Disadvantages for the franchiser?

• Reputation depends on how good franchises are

  • This means that if one branch has bad publicity it affects all branches which could give the brand a bad reputation so it will have less customers

• Franchiser only receives a share of the profits and sales revenue depends on the ability of the franchisees

  • This means that the franchiser may have less profit to re-invest into the business

Advantages for the franchisee?

• Starts with an established brand

  • This means that the business has an increased chance of succeeding with the business

• Attracts new customers quickly

  • This means that the business has a reduced risk of failure and can take more risks to enhance the business

• Given training from franchiser

  • This means that the franchisee is less likely to make mistakes so a higher customer satisfaction

Disadvantages for the franchisee?

• Has to be run directed by franchiser

  • This prevents the business owner from making decisions based on their community

• Part of profits and sales are preached to franchiser

  • This means that money cannot be reinvested back into the business

Features of public sector organisations?

• owned by the government on behalf of tax paying public

• Run by a board of trustees

• Finance by the government from taxation national insurance and excise duties

• Controlled by the local government

• Provide services that are essential for individuals