Business Sectors and Types of Business Organisations

Sectors

  • Business organizations operate formally in one or more of the following sectors:
    • Public
    • Private
    • Not-for-profit/voluntary (also known as the ‘Third Sector’)

Public Sector Organisations

  • Organizations owned and controlled by either:
    • National governments, for the benefit of the whole nation
    • Local authorities, for the benefit of local areas.
  • The term public sector is very broad, embracing political, economic, and legal organizations.
  • Responsible for the administration and welfare of the nation and its people.
  • Two major administrative levels:
    • National government: Responsible for how a country is run. They formulate policy, create economic stability, provide public services, manage defense, and maintain social order.
      • Government departments are staffed by the Civil Service and run organizations such as the British Army, DEFRA, and the NHS.
    • Local authorities: Responsible for a broad range of local services and infrastructure, such as health and social care, environmental services, education, economic development, and planning decisions.

Private Sector Organisations

  • Businesses ranging in size and structure, owned and controlled by an individual or groups.
  • The purpose is to generate profit from their activities.
  • Examples from the agriculture, environment, and animal care sector include:
    • Plant nurseries
    • Farm businesses
    • Land-based engineering workshops.
  • Private sector organizations range in size:
    • Micro business: 1–9 employees
    • Small business: 10–49 employees
    • Medium business: 50–249 employees
    • Large business: 250+ employees (no limit).
  • The size of the business may inform the type and structure it is legally allowed to adopt.
  • Four main types of business structures in the private sector:
    • Sole trader
    • Partnership
    • Cooperative
    • Limited company
  • Common business types in land-based industries:
    • Freelance: A type of sole trader who is self-employed but carries out contract work for other businesses.
    • Franchise: Where the owner licenses its operations, products, branding, and knowledge to other individuals for a franchise fee.

Types of Private Sector Organisations

  • Sole trader
    • Self-employed worker
    • Freelancers
    • Solopreneurs
    • Example: Self-employed gardener
  • Partnership
    • Ordinary partnership
    • Limited liability partnership (LLP)
    • Example: Partnership of solicitors or accountants
  • Cooperative
    • Social clubs
    • Sports clubs
    • Mutual and beneficial societies
    • Example: The Cooperative Society
  • Limited company
    • Private limited company (LTD)
    • Public limited company (PLC)
    • Multinational corporations (MNC)
    • Community interest company (CIC) (also public sector)
    • Franchises

Not-for-profit/voluntary organisations

  • Three main types of organizations in this sector:
    • Registered charities
    • Voluntary or community groups
    • Non-governmental organizations (NGOs).
  • NGOs are organizations with social or political aims, which are independent from government and operate on a not-for-profit basis.
  • Some NGOs have charitable status, others do not.

Not-for-profit organisations – examples

  • Range from small local groups to national and international organizations.
  • Examples include:
    • Charities: The Woodland Trust, WWF
    • Voluntary or community groups: The Kittiwake Trust, local groups staffed by volunteers to safeguard green spaces
    • Non-governmental organisations: Friends of the Earth, Amnesty International.
  • Social enterprise organisations are started by people who have a community or cause in mind but can either be not-for-profit organisations or profit-orientated with profit-sharing values.