Unit 2: Business Organisation (2)

  • Created by: jj_123
  • Created on: 28-04-15 19:44
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  • Unit 2: The Business Organisation
    • Effects of Expansion on Stakeholders
      • ShareholdersBenefit from profit but asked to invest more money.
      • Employees Greater job security but less involved.
      • Customers lower prices but less competition so could charge higher prices
      • Government: Collect more taxes
      • Local Community: Local jobs but noise pollution or traffic
      • Suppliers: Increased sales as more supplies needed but less negotiation on prices.
    • Private Limited Company
      • Advantages
        • More status than sole trader/ partnership
        • Limited Liability- Cannot loose more than you put in
      • Disadvantages
        • Accounts are available to general public
        • Cannot offer shares to the general public
    • Public Limited Comapny
      • Advantages
        • Limited Liability
        • Status of company increased.
        • Raise more capital by selling shares through stock exchange
      • Disadvantages
        • Disclose main accounts to public
        • Shareholders want to make as much profit as possible making it difficult to pursue other aims
        • Shareholders own company but directors run company. 'Divorce of ownership and control
      • Allows any member of public to buy shares in the company.
    • Social Influences
      • Many businesses are trying to operate in a sustainable way.
      • Taking issues seriously give firms a competitive advantage.


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