business organisations

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• Board of directors / managing directors: they are at the top of the internal organisation of a company; they are responsible for the various departments.
• The marketing departments: is responsible for market research, advertising and distribution.
• The finance department not only deals with the financial resources of the company, but it is also responsible for the billing.
• The sales department is involved in selling what the company produces or manufactured.
• The purchasing department is responsible for buying what the company needs, such as raw materials, equipment, etc.
• The personnel department handles the administration for all the members of stuff by recruiting and firing.
• The production department turns the raw materials into finished products.

SOLE TRADER
This is the simplest type of business; it is set up by one person who is entirely responsible for his own business debts: he has unlimited liability. The advantages are that the owner can monitor everything personally, he receives all the profits and he can make decisions quickly. The disadvantages are that the owner can lose all his personal assets, he dispose of limited financial resources and there is no one to share the workload with.
PARTNERSHIP
Is formed when two ore more people set up a business together. There are two types of partnership:
• Unlimited partnership, where all partners are liable for the debts of any of the other partners.
• Limited partnership, where some partners only contribute capital and do not take an active role in management. The are liable only for the amount of money they initially invested in the business. Instead some other partners have unlimited liability.

LIMITED COMPANIES
A limited company is formed by a minimum of two shareholders. Shares are the result of dividing the capital invested in a company into equal units. Any profits made by the company are divided among the shareholders in proportion to the amount they have invested, and these payments are called dividends. If a limited company goes bankrupt, each shareholder is only liable for his original investment and not for his personal assets. There are two types of limited company:
• Private limited company: must have “Ltd” after their name, cannot be quoted on the stock exchange and their shares can only be sold with the agreement of all the shareholders.
• Public limited company: they must have “Plc” after their name, they can be quoted at the stock exchange and their shares can be sold with no restrictions.
FRANCHISING
Is a business system in which a company, the franchisor, offers someone, the franchisee, the rights to use its trade name and to sell its products. The benefits of a franchise for a franchisor is that ha has to invest relatively little capital in distribution outlets, he also receives an initial payment and a percentage for annual profits. The franchisee receives the shop furniture in the company style, marketing support, training and commercial advice from the franchisor. They also don’t need to invest capital in advertising campaigns if the trading name of the franchisor’s business is a well-known one.
LICENSING
If a company lacks the money to transport his goods abroad, it ay decide to allow a foreign manufacturer to use its brand names, patents, and expertise, in return for a licence fee. This is an advantage for the licensor if capital is scarce or if import restrictions exist in the licensee’s country. The advantage for him is that he earns money thanks to a well-known and marketable product.
JOINT VENTURES
Is a business formed by two ore more companies. Each company invests some capital in the venture. In this way, the costs and profits are shared in agreed proportions between the companies.
• Vertical J.V.: this involves two businesses forming a company Each one specialises in a different stage in the production of specific goods or services.
• Horizontal J.V.: this involves two businesses forming a company, but unlike a vertical one these two companies are involved in the same stage of production/ distribution of the goods of services.
• Conglomerate J.V.: this involves two companies working together with completely different business activities. This J.V. could arise if the demand for a company’s original product decreased and the company decided to invest its capital elsewhere.
COOPERATIVES
Are business organisations where all employees have a vote, no matter how much work or money they put into the co-op. all members have limited liability.
HOLDING COMPANIES
Is a company that acquires control over another company. The holding company will have majority control over the production and distribution of the company it has acquired. It can also diversify into other fields to obtain a stronger position in different sectors.
MULTINATIONALS
Is a company which produces in more than one country but has its headquarters in just one. Profits go back to the multinational’s country of origin.

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