Solihull college = government funding +student income = improved facilities e.g. more computers, book etc.
The public sector is important to the British Economy as it contributes towards employment and national outputs etc.
The main examples of public sector organisations include the National Health Service, Local government etc. The strategic objectives employed by the organisations need approval by the state, the state can also layout rules and guidelines which the must abided by.
Here are some examples of public sectors organisation:
British Broadcasting Commission- this is unique, as the chair person is responsible to the Home Office, their revenue is generated from TV licence payers. They are a non-trading service.
Public Utility- Organisations such as water and gas companies used to be owned by the state however through privatisation it has switched hands to the public sector, vice versa, this has happened to the coal industry, where organisations such as British Coal have been bought up by the government from the private sector.
Co-operatives
Co-operative are business organisations where all the members have a hand in running the business including the responisiblites and decision making. The profits are shared equally amongst all members. All the members have equal voting rights. Sometimes decision making can be delegated to a manager to improve efficiency, examples include retail high street stores.
Non profitable organisations
There other non-profitable organisations which are known as voluntary business. Their main purpose is to help a cause e.g. charities. Their main objectives is to raise as much money as possible. So they can help their cause more. None of the members keep the money as profits, all their income must go towards the cause.
Private sector
The private sector includes all the businesses set up by a individual or a group of people. Their main purpose is to make a pofit. The types of businesses in this sector vary considerable some are small retail shops with one owner to multi-nationals which operate in various countries e.g. ICI
The businesses will vary according to their legal form and their ownership. Within the private sector ther are two types of businesses unincorporated and incorporated businesses.
Unincorporated businesses are where there is no legal difference between the business and the proprietor. They have unlimited liability meaning the owners are responsible of any loss; this could also result in a loss of personal assets for the owner. Incorporated businesses have separate entities from the business meaning the business can be sued, taken over etc. The owners have limited liability meaning if the business suffers any loss, the owners will only lose how much they have invested.
Comparing organisations
There are many ways of comparing organisations, for example in the private sector the way a sole trader maybe set up is totally different to the way a Public limited Company will be set up.
Figure B
You can also compare business structures between sectors e.g. a sole trader would have two levels in the hiercahy (Figure B), the owner and the workers. Also communication is mostly done on a one-to-one basis, this structure is very similar in partnerships but in the incorporated businesses like a private limited company, they have more larger and complex structures, with various departments.
Figure C
The diagram above illustrates the typical structure of a Private Limited Company. Which is more complex and communication between parties would be harder. So if a worker wanted to raise a complaint it would have to go through all the levels of the hierarchy making this harder and more time costly than if the same situation appeared in a sole trader.
Decision making would also be more difficult in incorporated businesses as delegation would depend on various matters, including the structure the business decides to utilise.
The personnel involved in various businesses vary. In a sole trader it may involve 2-3 people but in a Public Limited Company it a may concern 300-400 people.
When comparing a private sector business with a public sector or a non profitable business the main difference that appears is the purpose of the business for some it is to make a profit and in to others it is to provide a service or even to help a cause.
