1.2 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

Non-profit organisations

Most businesses that we will be looking at during the course operate in the private sector of the economy. That is, they are privately owned by individuals or shareholders and we assume that their main aim is to maximise profits.

However, there are many other types of business organisation that you may also come across during your course. One of these is a non-profit or not for profit organisation. In a way the name speaks for itself, but this doesn't mean that they don't make a profit; just that it is called a surplus. They may have a surplus of income over expenditure, but this will be ploughed back into the organisation not distrbuted to owners. Non-profit organisations may be clubs, charities (NGOs), pressure groups or other similar organisations that have some of the same aims as a private business, but profit isn't one of them!

Non-governmental organisations

Non-governmental organisations (NGO's for short) are organisations that may take part in business activity (as we have described it) and operate in the private sector, but their interests are more likely to be the development of the community and run for the benefit of others.

Charities

Charities are a form of non-profit organisation with the key function of fundraising to support a chosen cause or a group of individuals. Charities tend to be run along business lines, because they aim to maximise their donations and minimise costs.

They seek to educate and inform the public about the cause they are supporting and may act as a pressure group by lobbying government to increase resources allocated to underprivileged or excluded groups with the aim of improving social welfare. They may also seek to raise awareness of a social problem such as homelessness or medical issues such as AIDS.

Since charities do not sell in the conventional sense, they still use marketing to increase profile of their cause and to create brand awareness. Many charities use celebrity endorsement to raise their public profiles. Charities are often run by a combination of professional managers and full-time employees working alongside individual volunteers.

Charities need to be registered and restrictions may be placed on their operations. Governments impose obligations to report fully on their financial position. It is not unknown for bogus charities to be setup and for funds to end up in the pockets of unscrupulous founders.

Large companies may wish to associate themselves with charitable organisations to raise their ethical credentials. Donors to charities may receive tax allowances.