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Assignment 1

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.

Partnerships By definition Beside charter Owners must Vietnam


as partnerships, capital from take Association of
it must have at partner member, responsibilities certified Public
least two organization when they get accountant portal
partners in can rise capital risk by all their (VACPA).
collaboration from property. So, International
and unlimited contributing risk level of Business name is
maximum partnership, members are Vietnam Auditing
number. because there high. Next to, Partnership
Besides, law are a lot of not to issue Company. It is in
also enables to others shares, so it association with
have contributing cannot raise Moore Stephens
contributing partnership. capital from International
capital partners. Small scale, few external. If there Limited.
Each owner members so it is are 2 or more
must have easy to manage. owners,
responsibility by Among sometimes it
all their property members have causes conflict
when company reputed, so among them.
get risks. But, believe For example,
contributing together. viewpoint
partners just Owners have divergence,
must take right to decide individuals
responsibility all activities conflict. If
equivalent to the about profit partnership
amount of distribution. member leave
money that they Furthermore, organization,
contributed. the combination they must take
Partnerships of much good responsibility of
have legal status people create a project before
and do not have reputed working leaving
right to issue environment. organization.
shares.

Single-member Single-member The biggest The Single-member


limited liability limited liability advantage of mobilization of limited liability
companies companies is this type of capital are companies
owned by an single-member confined, environment
individual or an limited liability because of not Vinacomin
organization. company is that issuing shares. (Vietnam). It
Owner must be the owner of the Therefore, it operates in the field
responsible for company will will reduce the of building
all activities of have full control development environmental
company by over all matters ability of works.
range of charter relating to organization
capital. It has operate the because of the
legal status company. Next lack of large
when issued to, the owner capital to be
business just take able to
certificate and responsible for implement
do not have right the activities of business
to issue shares the company breakthrough
within the plans. Because
amount of there is just an
charter capital owner, it is
contributed to confined create
the company, so ability and
it is less risky comments.
for the owner. If When
it is compared organization
with the sole want
trader, it is mobilization of
absolutely more capital, it is
superior. required to
change kind of
organization.

Multi-member The number of Like single- Members with Hai Phong


limited liability member is more member limited less capital are cigarettes Multi-
companies two members liability dominated by member limited
and fewer 50 company, the members with liability companies.
members. All of owner of multi- large That is company
them must be member limited contribution. which operates
responsible for liability The operation cigarettes
debts and companies just will be complex production.
activities of take responsible than single-
enterprises for the activities member limited
when business of the company liability
process. It has within the companies.
legal status amount of It also does not
when issued charter capital have right to
business contributed to issue shares, so
certificate and the company, so it cannot
do not have right it is less risky mobilize from
to issue shares. for the owner. external. Due to
Because of the limited
having many liability regime,
members than so the reputation
singe-member, of the company
so it can for partners,
mobilization of customers are
capital better. also affected.
The number of Limited liability
members is not company will be
too much and tight
the members are management of
often relatives, law than sole
so the trader,
management partnerships.
and operation of
the company is
not too
complicated.
This
organization
also confines
intrusion of
strangers into
company, so it
shows high
security.

Joint-stock Joint-stock The liability Companies - FPT is one of joint


companies companies has regime of a joint have too much stock company
some stock company members, so it is which operates in a
characteristics. is limited difficult to lot of fields. Such
Charter capitals liability, so manage. as, technology,
are divided shareholders are Members in telecommunication,
becoming equal only responsible company cannot distribution and
shares. Each for the debt and know each retail, and
shareholder has other property other, so it is education.
those equal obligations of difficult to get - CP Livestock
shares. the company out of conflict. Joint Stock
Shareholders within the Because of Company. It
must be more 3 amount of complication of operates in the field
members and capital joint-stock of industry,
not limited contribution. companies, so it agriculture and
maximum Therefore, the is tight food processing.
numbers. The risk level of management of
shareholder is shareholders is the law. This
only responsible not high. The organization has
for the debts and operation of the a large number
other property joint stock of capital, so it
obligations of company is very is also tight
the organization wide in a lot of management of
within the fields or a lot of financial
amount of sectors. The departments and
capital capital structure auditing.
contributed to of the joint Beside,
this stock company shareholders
organization. is very flexible, must pay tax for
Unlike other because of law base on an
organizations, having right to amount of share.
joint stock issue shares. It Due to large
companies have facilitates many scope, to
the right to issue people to establish an
shares to raise contribute organization
capital. A joint capital to the also is
stock company company. There difficulty.
must have the are a lot of Securities are
general meeting members, so it not high as
of shareholders, will have many limited liability
the board of comments company
directors and the more. because all
director. Participants are activities must
also unlimited. notice for
It is easy to buy shareholders.
shares.
Private limited Private limited Like, single- Owner will get Hai Linh Private
liability liability member high risk, for limited liability
companies companies are company, only they must take company. Hai Linh
owner by an an individual is infinite does business in the
individual who owner, so they responsibilities. field of marble,
will be will have right Private sanitary equipment.
responsible for full decision companies must
all property. about not contribute
This company companies. charter capital
does not have Private limited or buy shares in
issue shares. company can other
mobilize capital companies.
from smaller Private
companies companies don
Shareholder is not have legal
less bound by status.
law.
The structure of
private
companies are
simple and
small, so it will
be easy to
manage.
Creating more
trust, and
collaborative
business.

Public limited Shareholders Because not Company must British petroleum.


liability not limited, but limited be supervised Company does
companies it is necessary to shareholder, so not only law but business as a global
have at least 2 capital increase also society. energy business
people to rapidly. The cost for working across the
operate. This Reputation of activities are world.
company can be company are pretty much.
issue of share to known by There are a lot
raise capital. society. It is of members, so
Public flexible for it is often
companies has a shareholders unstable.
huge amount because they
capital. can buy, sell,
transfer without
agreement.
Franchises Franchises is a For the For the Trung Nguyen
permission an franchisee, they franchisee, they coffee is a famous
individual or an do not need must do brand in Vietnam.
organization be build brand, business within Enterprise does
done business, avoid being risk the way business in the field
produced, when starting businesses that of producing and
serviced base on business have been processing coffee.
the brand is because prescribed Some country are
available. The franchisor available. So, franchised such as,
franchisee must already are a they have no Chinese, England,
organize all famous brand. right to increase Russia,
activities Secondly, creating ability
business in franchisee are in business.
regulations of inherited They do not
the franchisor. experience, obtain 100%
Such as, secret, so they profit, because
business names, do not need of distributing
business spend time to for franchisor. A
slogans, brands, research. franchisor will
and business For franchisor, have a lot of
secret they expand franchisees, so it
Conversely, their brand, makes
Franchisor must maybe in the competition.
control, world, so value For the
guidance, of business franchisor, they
training for increase more must notice the
franchisee. and more. It don disputes of
not spend too business
many capitals to establishments.
invest when They may be
they want to affected by a
build strong franchisee
systems. They which operates
will obtain not good. They
amounts of need know
money from clearly foreign
franchisee. law when they
want to
franchise for
foreign.
Licensing Licensing is an For the licensor, For the licensor, - Disney is a
arrangement It is easy to if the licensee famous enterprise
between two enter difficult have poor which does
enterprises. An markets, quality business in the field
enterprise will especially management of services.
allow other foreign market. that can damage Enterprise
country The cost is not brand. It can specialize in
company be expensive. Risk lose intellectual cartoon film
produced their capitals are also property and production.
product based lower. become
on specific For the licensee, competitor.
requirements. they is not For the licensee,
Licensing controlled by the license
enterprises will licensor. They duration often is
allow partners achieve limited.
used intellectual accumulated
property, experience from
design, and long time ago.
business form Risk capitals are
also low like the
licensor, for it
achieve a
product that is
established.
Joint ventures Joint venture is This If joint venture Asem International
an enterprise organization is company get Education And
which collaboration of risk, private Service
collaborate by good resources, business may be Corporation
two or more it may have a affected a little.
organizations professional It is difficult to
from different team. avoid
countries. They If projects are disagreement
will carry out a failed, the losses among
project together. will distribute organizations.
It is suitable equal division.
some company Advertising
which lack of own business
capital, labor, and creating
knowledge good
therefore, this relationship in
company must market.
require amounts
of large capital
and many
labors.

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