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Different Types of Organizations
Public and private sector organizations
• private sector: businesses owned and controlled by individuals or groups of individuals
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Often provide essential goods and services for people
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For-Profit organizations
the three main types of organizations are:
• sole traders
• partnership
• companies/corporation
Most businesses that operate in the private sector aim to make a profit
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For profit-social enterprises includes
• cooperatives
• microfinance providers
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It is
a business with mainly social objectives that reinvests most of its profit into benefiting society rather that
maximizing returns to shareholders
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• social— to provide jobs or support of local, often disadvantaged communities
• environmental—to protect the environment and to manage the business in an environmentally sustainable
way
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non-governmental organization (NGO)
charities

Private Limited Company: is a company that cannot raise share capital from the public
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Minimum people required are 6 and maximum 50
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Firms Objectives
A mission statement is a way of defining briefly and
the reason for the business’s present existence
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A vision statement defines where the company sees itself moving to in the future
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Common business Objectives

All firms will consider the following objectives important
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These objectives will depend on the age of the firm and the prevailing external environment
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Strategic and tactical objectives

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aims: are general statement of what a business intends to achieve or wants
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Changing business objectives
Business can change their objectives over time
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Some of the
more significant reasons for businesses changing their objectives include:
• a business may have satisfied the survival objective and now needs to pursued objectives of growth or
increased profit
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Why do firms set ethical objectives?
internal factors:
• a small start - up business may aim to survive in the first year
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• Technology might change product designs, so sales and production targets might need to change
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Before making significant change to objectives, senior managers need to
consider:
• is the change significant and long enough to warrant a change in objective?
• what would be the risk of not changing the objective?
• what would be the cost and other consequences of new business objectives for the business and its staff
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Ethical— reducing pollution by using more environmentally friendly processes, increased recycling of waste
materials, conditions of trade
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examples of unethical behavior:
• financial dishonesty
• environmental neglect and damage
• exploitation of the workforce
• exploitation of suppliers
• exploitation of consumers
Advantages and Disadvantages of “acting” ethically
advantages
• there is considerable stakeholder pressure to “do the right thing”
• it is a way to differentiate itself from the competition and improve costumer perception
• employees are motivated an will stay longer
disadvantages
• it does tend to increase costs and therefore lower profits
• it can be difficult find suppliers who have the same ethical stance
• shareholders may not be happy to have less profits
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CSR is further complicated when dealing with businesses that operate on a global scale in different countries
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Benefits

Drawbacks

image is improved with a green or socially responsible approach

cost could increase

attracting motivated employees who want to work for socially
aware business

shareholders may not accept lower profits in the short term

no bad publicity and pressure group action

loss of cost and price competitiveness if rivals are not CSR and
have lower cost

could have better relations with workers, suppliers, costumers

consumers may pay higher costs for CSR but not during economic
recessions

higher profitability

could be “back lash” if claims to be socially responsible are found
to be false

Should businesses adapt to meet CSR?
Businesses must adapt to meet their social responsibilities
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There are statistics that purport to show the beneficial impact of CSR on a company’s profits but they are
not yet overwhelmingly convincing
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Corporate Social responsibility Examples
• Tim Horton’s
• McDonalds
• Body Shop
The main reasons for changing corporate approaches to social responsibilities include
• increasing publicity from international pressure groups that use the internet to communicate, blog, raise
funds and organize protests
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• Global concerns over climate change and the impact this could have on social and economic development
is forcing companies to confront climactic consequences of their actions and investments
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