BUSINESS AND BUSINESS AND MANAGEMENTMANAGEMENT

MODULE 1MODULE 1

BUSINESS ORGANIZATIONS BUSINESS ORGANIZATIONS & ENVIRONMENT& ENVIRONMENT

Non-Profit & Non-Governmental Non-Profit & Non-Governmental OrganizationsOrganizations

NPO’s operate in a business-like NPO’s operate in a business-like manner but without the profit being manner but without the profit being the major objectivethe major objective

Sometimes referred to as Sometimes referred to as Merit Merit GoodsGoods

They aim to provide a service or to They aim to provide a service or to promote special causespromote special causes– Libraries; museums, hospitals, charities Libraries; museums, hospitals, charities

etcetc

Merit GoodsMerit Goods These are services which people thing These are services which people thing

should be provided in greater quantities should be provided in greater quantities

If the individual is left to decide whether or If the individual is left to decide whether or not to pay for these goods, some may not to pay for these goods, some may choose not to, or may not be able to.choose not to, or may not be able to.

NGO’sNGO’s

Operates in the private sector, ie it is Operates in the private sector, ie it is not controlled by the governmentnot controlled by the government

They do not aim primarily to make a They do not aim primarily to make a profitprofit

Are set up and operate for the Are set up and operate for the benefit of others in societybenefit of others in society– Also known as Private Voluntary Also known as Private Voluntary

OrganizationsOrganizations– Amnesty International, Unicef etcAmnesty International, Unicef etc

Types of NGO’sTypes of NGO’s Operational NGO’sOperational NGO’s

– Established from a given objective or Established from a given objective or purposepurpose

– Tend to be involved in relief-based and Tend to be involved in relief-based and community projectscommunity projectsOxFam and UnicefOxFam and Unicef

Advocacy NGO’sAdvocacy NGO’s– Take a more aggressive approach to Take a more aggressive approach to

promote and defend a causepromote and defend a cause– Direct action and lobbyingDirect action and lobbying

GreenPeace and Amnesty InternationalGreenPeace and Amnesty International

CharitiesCharities

A registered NPO with the key function of A registered NPO with the key function of collecting donations from individuals and collecting donations from individuals and businesses in order to support a cause businesses in order to support a cause that is beneficial to societythat is beneficial to society

Use a variety of marketing methods to Use a variety of marketing methods to attract donor attentionattract donor attention– Oxfam and World Wildlife FundOxfam and World Wildlife Fund

Some charities have very complex Some charities have very complex structures and are run by a Board of structures and are run by a Board of Directors similar to a large corporationDirectors similar to a large corporation

Advantages of CharitiesAdvantages of Charities

Provide financial support for the Provide financial support for the benefit of societybenefit of society

Exempt from paying taxesExempt from paying taxes Donors receive income tax benefitDonors receive income tax benefit Can protect employees with limited Can protect employees with limited

liabilityliability

Disadvantages of CharitiesDisadvantages of Charities

Lack of profit motive may cause Lack of profit motive may cause problems with staffproblems with staff

Trustees, who control the purse Trustees, who control the purse strings of a charity, do so voluntarilystrings of a charity, do so voluntarily

Finances must be carefully controlledFinances must be carefully controlled Survive solely on the donations – not Survive solely on the donations – not

allowed to sell anythingallowed to sell anything– Difficult during hard economic timesDifficult during hard economic times

Pressure GroupsPressure Groups

Established by the members of an Established by the members of an NPO to address a special interestNPO to address a special interest– Not a union or environmental protection Not a union or environmental protection

groupgroup Win public and media support Win public and media support Influence government policyInfluence government policy

Formative Case StudyFormative Case Study

Case:Case: Network Rail Network Rail

On “S” driveOn “S” driveSource:Source: Jones, Hall, Raffo, Business Studies 3 Jones, Hall, Raffo, Business Studies 3rdrd

Edition, Unit 6, page 60Edition, Unit 6, page 60..