BUSINESS ORGANISATIONS

UNIT 04

Competency level 4.1 : Introduces

“the organization concept” and classifies the business
Organizations in accordance with their ownership
 LEARNING OBJECTIVES

• DEFINES WHAT ORGANISATION IS AND GIVES APPROPRIATE INSTANCES.

• LISTS THE CHARACTERISTICS FOUND IN A FORMAL ORGANISATION.
• DEFINES “ BUSINESS ORGANISATIONS “
• CLASSIFIES BUSINESS ORGANISATIONS ON THEIR OWNERSHIP
• LISTS OUT PRIVATE SECTOR BUSINESS ORGANISATIONS.
• LISTS OUT PUBLIC SECTOR BUSINESS ORGANISATIONS.
• CATEGORIZES THE BUSINESS ORGANISATIONS ACCORDING TO THE OWNERSHIP AND
PRESENTS THEM DIAGRAMMATICALLY.
 ORGANISATION

• A SOCIAL UNIT MADE UP WITH A GROUP OF INDIVIDUALS JOINING TOGETHER

HAVING A COMMON GOAL IS AN ORGANISATION.
• EXAMPLES : SCHOOL, TEMPLE, CHURCH, SHOP
 BUSINESS ORGANISATION
• BUSINESS ORGANISATIONS ARE THE ENTERPRISES ENGAGED IN PRODUCTION, DISTRIBUTION AND
SELLING OF GOODS AND SERVICES WITH THE OBJECTIVE OF EARNING PROFITS OR ACHIEVING
SOCIAL WELL BEING.

• COMMON CHARACTERISTICS OF A FORMAL ORGANISATION,

• HAS A GOAL
• INVOLVES INDIVIDUALS
• HAS AN ORGANISATIONAL STRUCTURE.
TYPES OF BUSINESS ORGANIZATIONS

Partnerships Incorporated
companies
Sole
Traders/Sole
Proprietorship State Departments
Co-operative Corporations
Societies

Non profit Associations

organizations
Government
institutions
 CLASSIFICATION OF BUSINESS
ORGANIZATIONS

BUSINESS CLASSIFICATION

Based on the ownership Based on the objective Based on the scale

1. BASED ON OWNERSHIP
PRIVATE SECTOR ORGANISATIONS PUBLIC SECTOR ORGANISATIONS

Businesses owned by an individual or a Businesses funded and owned by the

group of individuals government.
Examples: Examples:
• Sole proprietorship • State departments
• Partnerships • State corporations
• Incorporated companies • State companies
• Cooperative societies • Businesses registered and owned
• Other associations. under Provincial Councils
• Local Government Institutions
2. BASED ON THE OBJECTIVES
PROFIT MOTIVE BUSINESSES NON PROFIT MOTIVE BUSINESSES

The main objective of the business is to earn profits The main objective of these businesses is to ensure
This type of businesses are operated under both welfare of members and the society.
private sector and public sector. Not for profit businesses are also conducted both
Examples: under private sector and public sector.
Sole Proprietorship Examples:
Partnership Co-operative Societies
Incorporated companies Other Associations
State Companies State Corporations
Departments
3. BASED ON THE SCALE
 SMALL AND MEDIUM SCALE BUSINESSES
Businesses employing less than 25
employees according to the Census and
Statistics Department are considered as
small scale businesses.
Ex : Sole Proprietorship
LARGE SCALE BUSINESSES
Businesses employing more than 25
employees according to the Census and
Statistics Department are considered as
small scale businesses.
Ex:
Incorporated companies
State Corporations
Departments
State Companies