Business organisation and environment

Table of Contents

1. Topic pack - introduction
2. 1.1 Nature of business activity - notes
3. 1.1 Nature of business activity - questions
4. 1.2 Types of organisation - notes
   1. Private and public sector
   2. Starting a business
   3. Profit-based organisations - legal structure
   4. Incorporated organisations
   5. Other types of private sector organisations
   6. Non-profit organisations
   7. Pressure groups
   8. Public-private enterprise
5. 1.2 Types of organisation - questions
6. 1.3 Organisational objectives - notes
7. 1.3 Organisational objectives - questions
8. 1.4 Stakeholders - notes
9. 1.4 Stakeholders - questions
10. 1.5 External environment - notes
11. 1.5 External environment - questions
12. 1.5 External environment - simulations and activities
13. 1.6 Organisational planning tools - notes
14. 1.6 Growth and evolution - notes
15. 1.7 Growth and evolution - questions
16. 1.7 Growth and evolution - simulations and activities
17. 1.6 Change (HL only) - notes
18. 1.9 Globalisation - notes
19. 1.9 Globalisation - questions
20. Print View

Private and Public sector

Private Sector Business

Definition: Organisations owned, controlled and managed by private individuals, usually for the purpose of making profit.

Public Sector Organisations

Definition: The public sector is the government sector of the economy - orgnisations owned and run by the government

Public ownership is much less common these days as it is believed that businesses are much more efficient if they are privately owned. In the past few decades (since the start of the 1980s) many businesses around the world have been privatised. This means that they have been changed from public ownership to private ownership.

However, the balance between public and private ownership varies considerably from country to country. In recent years, several governments have begun to create partnerships with the private sector (Think: Petrobras) and there is much more of what is called state capitalism

Infrastructure is another major area of plublic and private partnerships (Think: Toll Roads out of Sao Paulo)

Overview of types of Organisation

SUMMARY of types of organisations in the private and public sectors

Benefits of privatisation:

• Reduces costs - the profit motive, and competitive pressures will drive costs down. Often a state regulator ensures that private firms do not exploit their monopoly position in the market.
• Increases choice
• Increases quality
• Encourages innovation and invention
• Brings market forces into play in a positive manner for the consumer
• Saves the government money - the costs of the nationalised industries would be replaced by income from business taxes
• Widens share ownership in the population

Problems of Privatisation:

• Monopolies will be in private hands and need regulating e.g. Nuclear industry, transport
• Loss of income for the government - the general public loses a valuable resource
• Externalities - a private firm may not be so careful about environmental issues
  

Privatisation in many countries has been accompanied by the introduction of deregulation to promote competition and efficiency