1.

1 UNDERSTANDING BUSINESS

National Progression Award (NPA) in

Business with Information Technology (SCQF level 6)
Group Award Code: G9WW 46

Name Gabriel James Passed?

J229 76 Understanding Business - Outcome 1

1.1 Compare the features of privates sector organisation (such as a plc) with a public sector
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organisation. These features could include ownership, control and finance.

1 A private sector organisation can be run by a sole trader or in other ways such as a plc is run by a board
of directors whereas a public sector organisation is run by members of the government..

2. A private sector organisation is owned by a sole trader e.g. a plc is owed by at least two shareholders
whereas a public sector organisations is owned by the government.

3. A private sector organisation such as a plc generates its income through any member of the public
buying or selling shares within the company whereas a public sector organisation generates its income
through taxes payed by the general public.

1.2 Identify possible objectives of a plc and describe reasons why a plc would have each of these
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objectives.
Objective Reason for Objective

1 Increase and maximise its profits. In order for the shareholders to receive a good
return on their investment.

2 To survive In order for the business to keep making money and

therefore share prices will increase if the business
makes more money generating more income for the
business.

3 To grow This will result in lower costs for the business due to
the economies of scale, it also increases sales and
therefore increases profit.

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1.3 Describe 3 possible internal structures of a plc. Describe an advantage of the internal
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structures you have suggested.
Structure Advantage

1. Hierarchical Structure The staff are assigned with specific roles and jobs
and this decreases stress for staff increasing
motivation.

2 Flat Structure Few levels of management therefore speeds up

communication and decisions making in the
business making it more efficient.

3 Matrix Structure Due to there being no distinct levels of authority,

this leads to the staff having more of that authority
and flexibility increasing motivation.