PUBLIC SECTOR
The public sector comprises all organisations that are owned by the state. Public sector organisations might be controlled by central or local government and include organisations such as the Post Office, the National Health Service, Universities and the few remaining nationalised industries. Recent UK government have sold many parts of the public sector, with industries such as coal mining and railway now being owned and managed by private sector companies. The process of selling a public sector organisations and assets to individuals and businesses in the private sector are termed as privatisation. The privatisation programme is designed to raise large sums of money for the government allowing it to reduce tax rates, promote greater efficiency in industries.
Central government comprises ministries and departments, which establish policies and administer public services. Government activity has to be funded from taxation and other sources. It raises revenue from direct personal and corporate taxation, indirect taxes, sale of public assets, motor vehicle tax, national insurance contributions and national savings. The European Union may make some financial contributions, particularly to assist declining areas with employment creation projects.
Local government is an important part of country’s democratic structure. Councils and local authorities are responsible for education, social services, police, fire and many other local services within their own area. Local government is funded by council tax, government grants, loans and revenue generated by charges for service.
Quango stands for quasi-autonomous non-government organisation. The rationale for quangos is to provide some assistance to ministers and their departments in the formulation and application of policies. Anyone wishing to work on quangos can submit an application to the public appointments unit. The unit circulates a list to the various government departments responsible for the appointments.
PRIVATE SECTOR
The private sector encompasses businesses and organisations that are owned by individuals or groups of individuals. These are the categories they fall into;
- Sole trader
- Partnership
- Companies
- Private limited companies
- Public limited companies
- Franchises
A sole trader exists where a single person owns a business. This is very common form of organisation in the UK. Most sole traders work on their own. This need not be the case, and there is no theoretical reason why a sole trader can’t employ 100 of staff and own factories, however, in practice, it is unlikely that a single person could raise the amount of capital needed for this type of business. Typically sole traders are shopkeepers and market traders or they are self-employed in occupations such as plumbers, electricians and consultants. They are likely to trade in local or, at most, regional markets. The essential feature of this business is that the sole trader has full responsibility for the financial control
The minimum membership of a partnership type of business is two partners and the maximum twenty. Mutual trust and confidence bind partners because they are jointly liable without limit for each other’s actions. Every partner is entitled to participate in the running of the organisation but some who choose not to be are termed sleeping partners. To avoid disruption in a partnership organisation, it is usual to draw up a deed of partnership to identify the ways in which the partnership will be operated. Most partnership has a deed of partnership setting out the amount of capital to be contributed by each partner and the proportion of profits distribution.
The limited partnership Act 1907 allows a partnership to claim limited liability for some of its partners but there must be at least someone who is fully liable for all debts and practices of the organisation. Partnerships normally operate in local or regional markets though advances in information technology are allowing many partnerships to offer their services more widely.
A company is defined as an association of persons that contributes money to a common stock, employ it in some trade of business, and share the profit or loss arising out of that business. A company has a separate legal identity from its members and can sue or is sued in its own name. There are two types of company:
Public companies: the letters ‘plc’ distinguishes a public company from a private limited company. All companies with share prices on the stock exchange are public limited companies but not all public limited companies are listed on the stock market depending on size. To become a public limited company, an organisation must have an issued share capital of at least £50,000 and the company must have received at least 25% of the nominal value of the shares. A public limited company must be a company limited by shares, ensure its shares are easily transferable, have a memorandum of association with a separate clause stating that it is a public company etc.
Private companies: this type of company is suitable for small and medium-sized operation involving a handful of people. Private companies find it easier to attract capital because investors have the benefits of limited liability and this access to finance makes it simpler for the organisation to grow. A private company cannot advertise shares for sales, always end their company name with the word limited and may have just a single director etc.
Both require a minimum of two shareholders and there is no limit on the number of shareholders. Companies enjoy the benefit of limited liability.
A franchise isn’t a form of organisation as such but a way of managing and growing a business. Franchising covers a variety of arrangements under which the owner of the business idea grants other individuals or groups known as franchisees which can be a sole trader or partnership to trade using that name or idea. Franchising is a cheap and quick way in which business can grow. The person or organisation selling the idea known as the franchiser gains an initial capital payment, normally receives a share of the profits generated by the franchisee. The franchisee benefits by being granted rights to an exclusive territory and support from the franchiser in the form of staff training, advertising and promotion.
ORANGE ORGANISATION
The enormity of the task facing Orange at launch is difficult to appreciate today, given the current popularity of mobile phones. Back in 1994, the UK mobile phone market was a confusing place for customers. Digital networks had just been introduced, but few people understood the benefits. Complex tariffs and high prices made cellular phones only attractive to business customers: users had to sign-up to a three-year contract, with high monthly rental fees, high call tariffs and with little flexibility over the type of services on offer.
In April 1994, Orange entered the UK market as the last entrant in a field of four, with an ambitious aim: to become the first choice in wirefree™ communications.
To achieve this, Orange began building a strong, fresh, clear identity that set it apart from the clutter that characterised a market littered with high-tech jargon and complicated pricing (see also next section ‘’). It was the start of a revolution. Orange innovations like simple Talk Plans that offered real value for money, per second billing, Caller ID, itemised billing free of charge, and direct customer relationships changed people’s attitudes about mobile communications.
By the end of 1995 the Orange customer base had more than doubled to 785,000, compared to 379,000 at the end of 1994.
In 1996, Orange plc underwent its first initial public offering with the shares being listed on the London and Nasdaq markets on 2 April 1996. At flotation in London, Orange plc shares were priced at 205 pence. Major shareholders at the time were Hutchison Whampoa with 48%, and British Aerospace with 22%. With a valuation of £2.4 billion, Orange plc became the youngest company to enter the FTSE-100.
In July 1997 the company reached its first milestone of 1 million customers. Orange plc was named the best performing share in 1998, based on companies listed on the FTSE-100 throughout the year.
In June 1999 Orange won the Nat West/Sunday Times Business Enterprise Award, which described Orange as “one of the outstanding business success stories of the past few years” and the Orange story as one of “courageous vision and commitment to the long-running potential of mobile telecom”.
Orange began to expand internationally, with interests in Austria, Belgium and Switzerland – the first steps towards fulfilling a global ambition. By the end of 1999, Orange had also licensed its brand to operators in Hong Kong, Australia, Israel and India.
In October 1999, Mannesmann AG (the majority shareholder and the leading mobile operator in Germany) announced the acquisition of Orange plc for 0.0965 Mannesmann shares and £6.40 cash per Orange plc share. This valued the fully diluted share capital of Orange plc at £19.8 billion. The offer was completed in February 2000 and Orange was delisted from the London and Nasdaq stock exchanges.
During this time, Vodafone, a deal approved by the European Commission subject to an undertaking from Vodafone to divest Orange plc, bought Mannesmann itself.
In August 2000, France Télécom acquired Orange plc from Vodafone for a total consideration of £25.1 billion.
Orange plc’s wirefree™ interests were merged with the majority of those of France Télécom to form the new Orange SA group. On 13 February 2001, Orange SA was floated on the EuroNext Paris (formerly Paris Bourse) with a secondary listing in London; the share price was €10 per share in France, £6.40 per share in London.
Despite the changes in ownership, Orange continued to concentrate on providing the best service to its customers. In May 2001, for the fourth consecutive year, Orange UK was ranked no. 1 in J.D. Power and Associates UK Mobile Customer Satisfaction Study.
In May 2001, Orange SA was admitted to the CAC40, France’s top 40 companies ranked by market capitalisation.
Orange SA is one of the world’s leading communications companies, well positioned for the future. To date, Orange group companies have been awarded next generation (UMTS) licences in the UK, France, the Netherlands, Germany, Austria, Sweden, Switzerland, Portugal, Belgium, Denmark, Slovakia and Luxembourg
Orange SA Board of Directors
The Board of Directors establishes guidelines for the Company’s business and monitors the management’s compliance with its policies. Subject to the powers expressly attributed to the shareholders meetings and within the limits of its corporate purpose, the Board of Directors decides all matters concerning the satisfactory operation and business of the Company.
The directors are appointed or re-elected by the shareholders at ordinary general meetings. Pursuant to the Company’s by laws, each director is elected for a period of three years. Directors may be re-elected without limitation. The Board of Directors is currently made up of nine members.
Orange SA Executive Team
The Orange Executive Team comprises the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer plus seven Executive Vice Presidents who represent geographic operating units (UK, France, International) and functional areas of the business (strategic marketing, corporate strategy, people & communications, and global brand, marketing & products).
The Executive Team is charged with the day-to-day management of all aspects of the Orange group, from developing Orange's vision and strategic plan to managing the competitive and operational position of the group as a whole. It typically meets twice per month, often in London or Paris.
Benefits of being a PLC.
A public limited company can offer its shares for sale on the stock market in order to raise finance. When the business offers its shares for sale to the public it will employ a merchant bank to manage the operation, which is known as flotation. The cost of flotation can be high, sometimes running into millions of pounds for the largest issues.
Constraints of being a PLC
The company can’t offer their shares for sale to the public at large and so their ability to raise money may be limited. They must publish an annual report and balance sheet. Ensure that its shares are freely transferable. And have a memorandum of association with a separate clause stating that it is a PLC.
OBJECTIVES
An objectives is a goal the business wishes to achieve
A business will succeed in its aim through the achievement of a variety of objectives, including profitability, growth, quality and social responsibility. Some of the objectives a business could set could be one of the following:
- Make a profit
- Survival- beating the competition
- Increasing sales and market share
- Providing quality goods and services
- Developing a skilled workforce
- Helping society both locally scale
- Caring for the environment
ORANGE OBJECTIVES
Orange has always had a strong and unique vision: a world of wire free communications where people can access whoever and whatever they want, wherever, whenever and however they want. The customer is central to this vision, and it's the customer who is the essence of the Orange brand. By delivering benefit and value to our customers, we create a business that delivers value to our shareholders.
It is the vision and determination of Orange, which has delivered many remarkable achievements so far, and as we move further towards the ultimate vision, we see huge growth ahead for Orange, from three distinct sources in particular. To ensure we achieve this potential, our approach is to concentrate on the fundamentals of our business and get them right: essentials such as network quality, customer service and value for money. We aim to be the best in all of these, to exceed our customers' expectations.
Achieving this delivers greater customer satisfaction. Satisfied customers, getting real utility and benefit from our services, will use their Orange phone more, generate more revenue and be less inclined to switch to our competitors. Investing in the fundamentals also means that Orange is able to carry huge increases in traffic and customers, without degrading quality of service to the existing customer base.
This is important, because the traffic carried on our networks will continue to grow strongly. The three distinct sources of this growth are traditional voice usage, usage of new (non-voice) services, and the third area, revenue and margin growth as we integrate our businesses and leverage the brand across our footprint.
Looking at traditional voice usage first. We know that as mobile markets grow, an increasing proportion of total telecommunications traffic is carried on the mobile networks. We know that as mobile customers mature as users, their usage tends to increase, driven by the convenience and utility of the service. We also know that we can stimulate usage through enhancements to service functionality and segmented tariffing. For many of our customers, the Orange phone has now become their primary communications device.
We believe that this trend will grow strongly. In fact, the Orange phone will become more than a communications device: it will become the means through which our customers access and control their Orange 'life services'.
These factors can all increase average usage and revenues. We have demonstrated this consistently on our UK contract base for a number of years. We believe that the trend will continue, and indeed widen to our prepay customers and to other markets as their respective maturity grows.
Reflecting our unique confidence in this, our customers and our strategy, Orange believes that average voice revenues will be 5% higher in 2005 than they were in 2001.
Beyond this, we are working to further increase our market share, especially of the more valuable market segments. Even in markets that are almost fully penetrated, we see growth potential by winning customers from other operators. The re-branding will help this, supported as it is by a programme to ensure that the fundamentals of each Orange operation deliver the promises of the brand.
Secondly, Orange expects substantial growth from the usage of new, non-voice services. In some of our main markets, non-voice services (principally text messaging) already contribute well over 10% of network revenues, and usage is still growing strongly.
Around 60% of our UK customers regularly use text messaging, mainly for person-to-person communication. In both France and the UK, we have leadership of the short message market.
Usage is growing rapidly, and now widening to include other types of short message service, such as pre-registered information alerts and interactive applications with other media (such as television and radio).
However, Orange believes there is substantially more growth ahead, partly as usage of today's applications increases further, but more significantly, through the wide array of new services which will be progressively launched from mid 2002 onwards.
Today's text and voice messaging will evolve to integrated and instant messaging. Chat rooms and buddy lists will stimulate growth in traffic. Personal, virtual, location-sensitive information services will encourage loyalty as well as usage.
New services, such as multimedia messaging, will allow the transfer of pictures and photographs, sound and text.
Other services, often content-rich and delivered in conjunction with third parties, will combine the convenience of wire free with a wide range of day-to-day activities. They will facilitate shopping, banking and a host of other tasks, making our customers' lives easier.
Orange has been working hard, pulling together all of the elements needed to deliver these services. A solid network, strong partners, intuitive customer interface, suitably packaged content and appropriate "handset" devices are all an essential part of delivering the vision. From the middle of 2002, Orange will begin to roll out such new services, and they will evolve and develop thereafter.
Wherever possible, this will be on a group wide basis, consistent across our footprint. It is more important though that all new services are fully ready, and live up to Orange standards, before they are launched. The customer experience is the most important determinant of ultimate success.
By delivering services, which add real benefit to our customers, Orange believes that usage will develop steadily, building the associated revenues towards our target of non-voice services contributing 25% of network revenues by 2005.
And thirdly, as we integrate our operations under the Orange brand, philosophy and vision, we believe that we can leverage even greater benefits. Learning from each other, sharing development work and striving to bring each operator up to the level of best practice is true integration, and our top operational priority. We believe it will deliver substantial shareholder value.
The ultimate vision is a long-term one, but the path is evolutionary. In the ways outlined above, there are many steps from where we are today, and all the evidence and experience to date supports the strong belief we have.
MISSION STATEMENT
A Mission statement is a written statement setting out the aim of a business- sometimes it also lists business objectives.
ORANGE MISSION STATEMENT
‘The future’s bright, the future’s is orange’
The Orange mission statement is stated above and it is so obvious looking at the mission statement what orange means by it. What they are trying to say with this mission statement is that no matter the competition that comes before them they will overcome it and also that Orange will be around for years to come that’s why the future is bright for them. The mission statement also signifies that Orange will not fade out of business that’s why the future is theirs.
BUSINESS FUNCTIONS AND STRUCTURES
Whatever the size of the business- whether it’s a sole trader or PLC - or whatever the product, the factors of production are combined in a variety of functions. These include:
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Production- using the factors of production to produce a manufactured product or a service- it is the basic function of any business.
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Research and development- investigating new products and new ways of producing existing products.
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Finance- the control of money and the recording and reporting of money transactions- a central function in any business.
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Marketing and sales- finding
MANAGEMENT STYLES
For managers to be effective they need to adopt a style of management, which suits the structure, and culture of the organisations in ethic they work. It is also important that a managers able to change his or her style of management depending on the situation.
There are four main styles of management, which are recognised as being effective if used at the right time.
Autocratic
Managers who adopt an autocratic style of management will take full responsibility for everything and keep all their authority to themselves. They will tell their staff what to do it and will expect to be obeyed without discussion.
