AB - A1

Business Organisations, Stakeholders & the External Environment 

Definitions of Business Organisations

Much like human beings business organisations exhibit a stunning variety in terms of structure, purpose, financial make up, organisational culture etc. However we want to focus on what business org's have in common.

A definition presented by Buchanan & Huczynski notes: “organisations are social arrangements for the controlled performance of collective goals”.

1. “Collective Goals” - think of a cafe the organisational goal here is to feed and water guests and as is logically consequential turn a profit.

2. “Social Arrangements” - the key point to remember here is a group of people is needed to form a social arrangement and in turn to control, direct and manage a business organisation which operates upon the existence of shared goals.

3. “Controlled Performance” all organisations will develop specific systems & business procedures which allow the management of the business organisation to achieve any organisational goals set.

Key Concept – A business takes inputs and creates outputs that is raw materials are processed in a way which adds value to a final product. For example a university inputs students and outputs trained professionals in some cases.

Select which of the following are classed as business organisations.

  • A sole trader who sells flowers
  • Liverpool Football Club
  • A private tutor

Creating a budget meets the criteria of which element of the definition ?

  • Collective Goals
  • Social Arrangements
  • Controlled Performance

Achievement of annual growth is an example of which ?

  • Social Arrangements
  • Collective Goals
  • Controlled Performance