Professional Documents
Culture Documents
Introduction
This assignment will indicate knowledge of business and application of its. In particular,
the knowledge of organizations and business environment. According to this assignment, we
will understand of different types of business, purpose of them, their size and scope, and
organization structures and their relationships
LO1. Explain the different types, size and scope of organizations
Task 1. Explain different types and purposes of organizations; public, private and
voluntary sectors and legal structures
1.1 What is an organization?
Organizations has appeared since primitive days when people know how to collaborate
together to achieve common purposes. The more modern society becomes, the more developed
the organizations become. Nowadays, it forms a diversity structure which consists of various
types and goals. Social individuals who have general purposes connect together to create an
organization to obtain the best effective results.
1.2 Profit organization, not-for-profit organization, non - government organization
Almost people think that organizations do businesses for profit. As a matter of fact,
organizations are classified depending on their purposes. Because, there are some organizations
for sympathy. Therefore, there are two main organizations which are profit organization and
non-profit organization. So, what is profit? Profit is amount of money which earns from
businesses. Then, it is used to reinvest to increase more and more. Therefore, profit
organizations exist for profiting purposes from sells or services. Likewise, if there are not make
profit, it will not exist. The best important things in profit organizations obtains profit for
owners and stakeholders. In contrast, non-profit organizations also operate for profit. But, this
profit is not distributed for owners, shareholders and stakeholders. All profit are used for
development of society. Their main purposes provide products or services for serving society.
Moreover, the success of this organization is accessed with criteria which it is the number of
people they helped. Capital is mainly from investors, philanthropic organizations for social and
main labor resources that is volunteers. For example, some non-profit organization may be
charity, government organizations, QUANGOs,... Such as, United Nations Children Fund
(UNICEF) operates for all children. Besides these two organizations, there is also non-
government organization. This organization also do not operate for profit like non-profit
organization. It is not related to government and not be owned by any individual. It consists of
organizations, individuals that are not for profit. Capital of organization is mainly from
international community. They will solve social problems. Such as, environment, starvation,
poverty, and right, etc... For example, Red Cross which protects human life and health, help
injured people in the wars, is the largest humanism in the world. That is basic purpose of each
organization.
1.3 The range of legal structures associated with different forms of business
Table 1. Legal structures
Legal structures Characteristics Advantages Disadvantages An illustration
Sole traders When a person The ways to Owner need to Dong Tam plastic
has enough establish work a lot. private company.
money, they will company are Because Dong Tam operates
do business. not complex survival of in the field of
There are only like other organization is providing plastic
an owner who organizations. decided by product for
must take So, it can techniques, families.
responsibility by establish toward purpose
all property in organization of owner. There
activities of easily and do are only an
organization. not need to owner, so skills,
Beside it also spend too much knowledge can
has some time because of be limited.
servants. Owner no legal status. Comments to
must pay tax. Owner work create working
Each individual independence to environment
just establish be easy better also are
one an decision. Owner limited.
organization. have all right for Moreover,
They are not all activities of owner must take
allowed to have organization. responsibility
share or are a So, owner can by all property
member of a manage by which dislike
partnership, themselves or other
limited liability hire other to organization
company, and manage the just take
joint stock alternativeness. responsibility
company. Owner will by charter
obtain all profit capital. If small
from business. scale, it will
In business make company
process, owner which cannot
have right to compete with
raise or fall other large
capital. companies. All
Furthermore, above show this
sole traders are organization
ease to create which contain
belief for high risk.
customers Therefore,
because of owners do
unlimited business as sole
liability regime. trader, for they
always choose
reputed services
to create belief
for customers.
Such as, trading
gold, silver,
jewelry.