Business Environment

1.1. the purposes of different types of organisation

Organisations differ in scale, size, complexity, sector and type. The majority of organisations have a common purpose – the duty to provide a service.   As you break this down, you find that organisations have different purposes dependant on type plus other factors. Organisations have different purposes although they are the same type, for example, one commercial organisations purpose may be to grow into a new market sector e.g. from hardware to outsourcing whereas another commercial organisation may be looking to maximise profit within a bespoke market.

Different types of organisations:

      * Sole Traders

Sole Traders are the owners of their own business.   The business is basic with no complicated set up.   A Sole Trader is to provide a service to a client/customer and charge for that service. Profits, taxes, debts and business decisions are made by one individual. Examples include many small shops, plumbers, electricians, painters and decorators.  

      * Partnerships

Two friends of mine, doctor and dentist - recently qualified and plan to open a medical surgery forming a partnership.   In most cases, partnerships are formed when an organisation has between two and twenty partners.   Partnerships are established through the writing of a legal agreement which specifies rights and duties (witnessed by a solicitor).   Profits and losses are shared as defined in the legal agreements.   Although a partnership is more flexible than a sole trader organisation, there are more legal obligations. Examples of partnerships are accountancy firms and solicitors. The main purposes of a partnership organisation are to make a profit, but also to gain market share, satisfy stakeholders and be competitive. Partnership organisations may prioritise these aims dependant on their strategy.

      * Private Limited Companies (Ltd.)
UK Private Limited Companies (Ltd.) are registered with Companies House and have a...