1.2 Types of organizations

Public sector

Comprises or organizations that are owned and controlled by the central/local government

Private sector

Comprises of organizations that are owned and run by individuals or groups of individuals

Mixed economy

Economic resources owned and controlled by both private sector with very little state intervention

Free-market economy

An economic system based on supply and demand with little or no government control

Command economy

Economic resources that are owned, planned, and controlled by the state

Privatization

The sale of public sector organizations to the private sector (putting profit-making as one of their main objectives)

Sole trader

A business in which one person provides the permanent finance and in return, has full control of the business and is able to keep all profits

Partnership

A business formed by two or more individuals, with shared capital investment and usually, shared responsibilities

Limited liability

The only liability - or potential loss - a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder

Share

Shares are units of equity ownership interest in a corporation that exist as a financial asset providing for an equal distribution in any residual profits

Shareholders

A person, company, or institution that owns at least one hare of a company’s stock, which is known as equity

Private limited company

Organizations that are owned by shareholders who are often members of the same family who enjoy limited liability and shares are not listed on the stock exchange

Public limited company

Organizations that are owned by shareholders who have a say in the decision making process of the business who enjoyed limited liability and shares are listed on the stock exchange (stocks can be sold to the general public)

Social enterprise

A business with many social objectives that reinvests most of its profits into benefitting society or the environment rather than maximizing returns to owners (profit is not the sole objective of these enterprises)

Microfinance

Organizations who make financial services available to individuals or small groups of individuals whose needs would otherwise not be met by traditional financial institutions such as banks (they grant small loans to unemployed, low-income individuals to start their own business)

Public-private partnerships

An arrangement whereby the public sector enlists the help of a private sector organization in order to achieve its objectives more efficiently and effectively. Usually involved in large infrastructure projects

Cooperative

Organizations owned by its members who come together to work towards a common interest. They are run democratically - all members have equal voting rights in important decisions

Private finance initiative

Investment by private sector organizations in public sector projects

Non-profit organization

Any organization that has aims other than making and distributing profit and which is usually governed by a voluntary board

Non-government organization

Non-profit organizations, legally constituted body with no participation or representation of any government that states their purpose/mission as benefiting society or the environment

Charity

Non-profit organizations that exist to benefit the public and the finance is provided by individuals (donors)

Pressure group

An organization created by people with a common interest/objective who lobby businesses and governments to change policies so that the objective can be reached