Business: its objectives and structure

Business: its objectives and structure

1. Business Structure

   • Unincorporated Business
     • Sole Trader
       • Single Owner
         • Controls the business
         • Finances it
         • No new owners can be introduced
       • Unlimited liability
       • Small
       • Expands by emploing others
       • No legal formalities
     • Partnership
       • Two or more owners
         • More can be introduced
         • The decisions are made in an agreement between all of the owners
         • Finance the business and can ask for loans
       • Unlimited liability
       • Small or medium sized
       • Expands by adding more owners
       • No legal requirements
   • Limited Companies
     • Private Limited Company
       • Owned by a close group of people
         • In charge of raising capital
         • The shareholder who has more ownership makes the decisions
         • New owners can be introduced if everyone consents to it
       • Limited liability
       • Medium sized
       • Expands through mergers or takeovers
       • Legal requirements
         • Memorandum of Association
         • Articles of Association
       • Separate legal personality
     • Public Limited Companies
       • Owned by shareholders
         • Control the business
         • Finance the business along with banks
         • New owners can be introduced without everyone giving consent
       • Limited liability
       • Large
       • Expands through mergers or takeovers
       • Legal requirements
         • The company name should finish with "plc." or "ccc."
         • Must separate their capital
         • Must have at least two directors and two stakeholders
         • Trade the certificate

2. Business Objectives

   • Hierarchy of objectives
     • 1. Aim
       • Long-term goals that a business hopes to achieve. Central purpose of a business' activity
     • 2. Mission
       • Statement of the businesess' core aims, phrased in a way that motivates employees and stimulates interest of outside groups
     • 3. Corporate Objectives
       • Designed to turn into goals or targets specific to each business that can themselves be broken down into strategic departmental targets
     • 4. Divisional Objective
       • When corporate objectives are established, they are broken down into specific targets for separate division
     • 5. Departmental Objective
       • Each department sets up their own specific objective
     • 6. Individual Targets
       • Each employee creates their own personal objective
   • SMART Criteria
     • Specific
       • Objectives that applu directly to a business. Specific to each business
     • Measurable
       • Objectives in a quantitive value. Effective targets
     • Achievable
       • Setting achievable objectives
     • Realistic and relevant
       • Realistic when compared with the resources of the company and relevant to the people who have to carry them out
     • Time specific
       • A time limit should be set when an objective is established.
         • Without it, it would be impossible to asses whether an objective has been met
   • Importance
     • Helps direct, control and review the success of a business
     • For an aim to be achieved, a strategy should be set up and be constantly reviewed
   • Employees should know the objectives
     • More is achieved by having a better understanding of goals
     • Creates shared employee responsibility

3. Both topics are related

   • Business objectives depend on the longevity, the size and type of business
     • Smaller and newer business will be less ambitious about their aims than bigger companies
   • Business objectives deppend on the type of business
     • A hotel business won't have the same objectives as a matress selling business

4. Related to other topics

   • Business size
     • Unincorporated business tend to be small or medium sized
     • Limited companies are either large or medium sized
   • Entreprise and entrepreneurship
     • Business owners tend to be entrepeneurs
   • Management and Leadership
     • New business owners have to manage the business, at least until the business is big enough to hire a manager
   • Stakeholders in a business
     • Business owners have to interact with stakeholders
       • Suppliers
         • Needs its goods and services
       • Customers
         • They need someone to buy the goods and services being provided
       • Employees
         • They need someone to work for them
       • Local community
         • Needed to provide local services and infrastructural so the business can operate
       • Government
         • Needed to prevent unfair competition between businesses
   • Business and it environment
     • Businesses need resources, regardless of what type of business it is
     • Use the input and output model