BUSINESS AND BUSINESS ENVIRONMENT- ASSIGNMENT 01
Task 1
1. Explain the different types of organizations including their size and scope. (LO1)
1.1 Identification and explanation of different types and purposes of organizations. (P1)
A business organization is an individual or group of people that collaborate to achieve certain
commercial goals. Some organizations are formed to earn income/profit for owners, and other
business organization called non-profit organizations which are formed to work for societal
welfare. (Kokemuller, N. 2017)
The two main types of business organizations are profit-making and non-profit making
organizations. In accordance to Fritz, J. (2018) there can be misunderstanding between profit
and non-profit making organizations. Profit making organizations seeks to generate income
or profits for the business owners. The profits made by sales of products or services, measure
the success of these profit making companies and those profits can be shared with owners,
employees, and shareholders. Profit making businesses can be either be held privately or
publicly. Therefore the main purpose of such organizations is to make a profit for its owners
or shareholders.
On the other hand, non-profit making organizations, in accordance with Fritz, J. (2018),
typically have the common characteristics such as a mission that focuses on activities that
benefit the society and objectives are for societal welfare rather than solely for profit.There is
public ownership of such organizations where no individual will own shares of
the corporation or interests in its property. Income that a non-profit organization makes, will
never be distributed among any owners but instead the income will be reinvested back into
the organization’s funds to continue their purpose of benefitting the public through its
mission and activities.
On the other hand, there also government and non-governmental organizations. As defined by
Social Business Earth (n.d), “A Non-Government Organizations is a voluntary, non-profit
organization that operates, contributes to, or participates in, various projects on education,
training or other humanitarian, progressive, or watchdog activities. They usually collect
Page 1
Task 1
1. Explain the different types of organizations including their size and scope. (LO1)
1.1 Identification and explanation of different types and purposes of organizations. (P1)
A business organization is an individual or group of people that collaborate to achieve certain
commercial goals. Some organizations are formed to earn income/profit for owners, and other
business organization called non-profit organizations which are formed to work for societal
welfare. (Kokemuller, N. 2017)
The two main types of business organizations are profit-making and non-profit making
organizations. In accordance to Fritz, J. (2018) there can be misunderstanding between profit
and non-profit making organizations. Profit making organizations seeks to generate income
or profits for the business owners. The profits made by sales of products or services, measure
the success of these profit making companies and those profits can be shared with owners,
employees, and shareholders. Profit making businesses can be either be held privately or
publicly. Therefore the main purpose of such organizations is to make a profit for its owners
or shareholders.
On the other hand, non-profit making organizations, in accordance with Fritz, J. (2018),
typically have the common characteristics such as a mission that focuses on activities that
benefit the society and objectives are for societal welfare rather than solely for profit.There is
public ownership of such organizations where no individual will own shares of
the corporation or interests in its property. Income that a non-profit organization makes, will
never be distributed among any owners but instead the income will be reinvested back into
the organization’s funds to continue their purpose of benefitting the public through its
mission and activities.
On the other hand, there also government and non-governmental organizations. As defined by
Social Business Earth (n.d), “A Non-Government Organizations is a voluntary, non-profit
organization that operates, contributes to, or participates in, various projects on education,
training or other humanitarian, progressive, or watchdog activities. They usually collect
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