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Mr. Faron B.

Joseph
FAB STUDY SCHOOL
ORGANISATION
Section A

ORGANISATION DEFINITION:
Social arrangement
Collective goals
Controls performance
Boundary

WHY ORGANISATIONS EXIST/PURPOSE:


Achieve a common goal
Overcome limitations
Specialisation
Save time
Accumulate knowledge
Pooling expertise
Synergy (2+2=5)
Achieve a social need

ORGANISATION DIFFERENCES:
Profit / non profit
Legal status /size
Ownership
Activity
Control
Technology
Source of finance

Types of organisations
Private sector organisation NOT
owned or controlled by the
government
Public sector organisation owned or
controlled by government

Private sector
Private limited:
Owned by a small number of individuals
Ends with ltd
Public limited:
Owned by any person in the general
public / large number of individuals
Ends with plc

More types of organisations


Co-operate societies / mutual
associations owned by their
workers / customers
Non-governmental organisations an
independent voluntary group existing
for a purpose other than government
or making money

Stakeholders
An entity which can
affect or be affected by
an organisation.

Classifications of stakeholders:
Internal managers and employees
External government, pressure
groups and professional bodies
Connected shareholders, bank,
customers and suppliers

Mendelows stakeholders mapping


Low interest

High interest

Low amount of
power

Minimum effort
require

Keep informed

High amount of
power

Keep satisfied

Keep happy

Uncertainty
Simple

Complex

Stable

Low uncertainty
(certain)

Low to moderate
uncertainty

Dynamic

Moderate to high High uncertainty


uncertainty

Environmental Analysis
Analysis of the macro-environment (PEST):
Political / Legal
Economical
Social / Environmental protection
Technological

Political / Legal
Porter government affect economic structure
of industry:
Capacity expansion
Demand
Divestment
Emerging industries
Entry barriers
competition

Legal / laws:
General framework
Criminal
Company
Health and Safety
Data protection
Marketing and Sales
Environmental
Tax

Employment protection:
Retirement
Resignation
Dismissal
Wrongful dismissal
Unfair dismissal
Discipline procedures
Redundancy
Equal opportunities

Data Protection Act


Reason for Act:
Privacy unauthorised disclosure
Harmonise with European Union (EU)
Terms:
Data is about a living person
(not an organisation)
Data user organisation holding data
Data subject person data is about

Data Protection Principles:


Data captured/process fairly and lawfully
Obtained only for one or more purpose
Data should be adequate
Data should be accurate
Data not kept longer than necessary
Processed rights of data subject
Appropriate measures for protection
Not transferred to country with no data
protection law

Health and Safety at Work Act 1974


Duties of employer
To have safe work
systems and practices
To maintain safe and
healthy work
environment
To communicate health
and safety policy in
writing
To consult safety
representatives and
appoint a safety
committee

Duties of employee
To take reasonable care
themselves and others
To comply with health
and safety measures
Inform their employers
of any situation which is
a safety risk

Social and demographic trends


Population In UK increasing birth
rate and falling death rate
Family life cycle from single to
married with children
Social structure and class
Buyers patterns

Cultural trends:
Health and diet issues e.g.
increase of non smokers
Women at work
Environmentalism

Technological:
Span of control number of subordinates
directly under a supervisor
Tall and flat organisation - number of
management level
Centralisation and decentralisation where is
the authority
Computers and Internet
Outsourcing using external venders

Competitive forces

Porters 5 forces:
Potential threat of entry defensive
(barriers to entry)/offensive (welcome
new competitors)
Bargaining power of suppliers
Bargaining power of customers
Threats of substitute products
Competitive rivalry cost leadership,
product differentiation and market
focus

Value Chain Primary activities


Inbound logistics receiving, storing, distributing
input to the product
Operations production activities to create the
product
Outbound logistics storage (of final product)
and distributing the product to customer
Marketing and Sales activities associated with
encouraging the buyer to purchase the product
After Sale Services activities for providing
service or maintain product value

Value Chain Support activities


Purchased inputs / procurement
obtaining assets
Technology expertise, procedures and
systems
Human resources recruitment, training,
development and motivate
Infrastructure general management,
finance, planning and quality assurance

Macroeconomics
The study of aggregate decisions of all
households and business.
Four main objectives:
Full employment
Price stability
Balance of payment equilibrium
Economic growth

Factors affecting total demand:


Consumption
Investment
Government expenditure
Employment level
Price stability / instability (inflation)
Supply of money

Phases in the Business Cycle


Recession
Depression / Slump
Recovery
Boom

Macroeconomic camps
Monetarist
Money supply
Interest rates
investment

Keynesian
Fiscal policy
Borrowing
Government
expenditure
revenue

Unemployment
People who wants jobs but cant get a job
Rate number of unemployed X 100
divided by total workforce
Reasons why it will have unemployed:
Demand-deficient = supply > demand
Seasonal = time of the year
Frictional = in-between jobs
Structural = skills not in demand
Technological = replaced by computers

Taxation
Regressive more from poor person
Proportional same amount from
everyone
Progressive more from rich person
Direct pay to revenue service
Indirect collected by entity for IRS

Gross domestic product (GDP)


Output of business
Inflation price instability
More expensive to live
Increase cost of goods
Stagflation
Reduced GDP and increase inflation

Micro-economics
Inputs 5Ms materials; money; men and
women; machines; management.
Organisation Mullins: structure;
management; people; objectives
Consumption utility (pleasure); marginal
utility (pleasure to consume one more)
Outputs goods; services; knowledge;
information; social consequences

Market where buyers and


sellers meet
Demand amount buyers
want to buy
Supply amount sellers want
to supply

Factors affecting demand


Price
Household income
Demand/price of substitutes and
complement good
Taste and fashion
Expectations
Distribution of income

Factors affecting supply


Cost of making goods
Demand/price of substitutes and
complement goods and/or services
Expectation
Changes in technology
Other verifiable factors e.g. weather

Price theory
Demand interacting with supply
Short term = price = AR = MR

Equilibrium price demand = supply


Disequilibrium price demand
supply
Price Regulation
Maximum price price ceiling
Minimum price price floor
Minimum wages price floor for
labour

Elasticity
Price elasticity of
demand:
% quantity
demanded divided by
% in price
Q X 100 / Q divided
by
P X 100 / P

Income elasticity of
demand:
% quantity demand
divided by
% in income
If > 1 = income elastic =
luxury
If < 1 > 0 = income
inelastic = necessary
If < 0 = inferior

Cross elasticity of demand


% quantity demanded of good A
divided by
% quantity demanded of good B
If negative = complement
If -1 = perfect complement
If positive = substitute
If +1 = perfect substitutes
If 0 = unrelated