Organisational Purposes of Business

Contents Introduction I.Organizational purposes of business 1.Purposes of different types of organization 2.Objectives of different stakeholders 3.Responsibilities of an organization II.National environment that businesses operate 1.How economic systems allocate resources effectively 2.Impact of fiscal and monetary policy 3.Impact of competition policy and regulatory mechanisms Introduction This report would analyze the organizational purposes of businesses including types of organization, objectives, responsibilities, and strategies. What is more, the character of national environment that businesses conduct in is also discussed. Vietnam posts and telecommunication group (VNPT) and Vodafone group plc are two investigated companies of this report, would be analyzed in detail.

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  1. Organizational purposes of business
  1. Purposes of different types of organization
  • Categories of organization
  • Legal form
  • Sole trader: Sole traders are persons who conduct their own business. Most of sole traders have small business. They earn the whole profits of their business; however, they suffer all losses from their business. With sole traders, there is no difference between their business tasks and personal one. They are responsible for paying all business debts. Once the debt exceeds their business earnings, sole traders must use their non-business possession to pay for that.
  • Partnership: If more than two individual join for business purposes, partnership forms. Normally, partnership forms with the aim of increasing investments or incorporating skills.
  • Company or corporation: Companies or corporations are organizations that do business tasks and are responsible for their legal issues. Therefore, every debt or liability is not shareholders’ responsibility but the company’s. According to Companies Acts, there are two kinds of company: Public limited company and Private limited Company.
  1. Public limited company (Plc): Public limited company is officially traded on a stock market.
  2. Private limited company (Ltd): In private limited company, shareholders could only transfer shares through direct purchase.
  • Franchises: An individual could buy a license from the franchisor to have the right to produce and trade products under a famous brand in a particular location. (Business Case Studies, n.d.)

These four types of legal form above are popular in business markets. Each of them has specific functions, contribution, and impact to the economy of a country. (BPP Learning Media, 2013)

  • Size

In the term of size, organizations divides into three groups: small businesses, medium-sized businesses and large businesses. (BPP Learning Media, 2013)

  • Small businesses: Sole traders or partnerships operate this category of businesses that employ under 50 people only.
  • Medium-sized businesses: Businesses that employ 50-250 people and run in a nation or a particular location.
  • Large businesses: Large businesses are large in size (more than 250 people) and have many branches in various locations.
  • Economic Activity
  • Level of activity
  • The primary sector: This industries sector includes companies involving in producing raw materials (such as crops, minerals, etc.)
  • The secondary sector: Industries that use raw materials from primary sector.
  • The tertiary sector: This sector consists of distribution and services industries. They function to bring products from manufacturers to consumers or provide services.

Organization in these three sectors have strong relations among others. Although their functions are different, they all contribute to the development of the economy. (BPP Learning Media, 2013)

  • Ownership
  • Private sector:

Private sector consists of organizations founded for personal objectives, and usually prioritize profits. They could finance by allotting shares or borrowing money from banks.

  • Public sector:

Public sector includes organizations that founded due to community’s interest, funded by the government and belong to government department. They are founded for not only profits purpose but also socio-political aims.

  • Non-government organizations(NGOs):

They are non-profit organizations that operate independently from the government. The government could fund them; however, no government representative is the member of those organizations.

  • Identify investigated business organizations
  • VNPT

VNPT is a telecommunications company owned by Vietnam’s government. This company has more than 90,000 employees, covers 63 provinces and cities in Vietnam. (VNPT, n.d.) Therefore, this company is a large business organization. The main functions of VNPT is offering telecommunication and information technology services, so it is in tertiary sector. VNPT is a state-owned company belonging to public sector because it was founded and funded by Vietnam’s government. This chart shows organizational structure of VNPT. Culture of VNPT consists of many standards that every employee must has. First, every employee of VNPT needs to have these attitudes at work: enthusiastic, responsible, polite, and punctual. What is more, they need to listen to their colleagues, be cross with managers. (Anon., 2014)

  • Vodafone

Vodafone group plc is a British multinational company. It has been a public limited company since 2000. Vodafone is listing on London Stock Exchange and shares are traded as VOD. With more than 90,000 employees (2013), Vodafone is a very large organization. Vodafone is in the tertiary sector that functions to provide mobile services such as: call, text, internet, etc. It belongs to private sector because this company is owned by shareholders instead of government. This following chart illustrates the organizational structure of Vodafone: There are many common things that form Vodafone’s culture. Vodafone’s employees are energetic, open-minded, and flexible. What is more, every employees at Vodafone get training, resources and what they need to develop themselves. (Vodafone, 2014)

  • Comparisons between two organizations
VNPT Vodafone
Vision Becoming the biggest group in Vietnam and reaching international level in terms of posts, telecommunication and information technology in order to compete with other international telecommunication groups. (VNPT, 2014) Providing great data services and products, bringing the best experiences to the customers. (Vodafone, 2014)
Mission Making great efforts in developing posts and telecommunication technology to bring superior values to Vietnamese consumers. (VNPT, 2014) Be the communications innovator in a widely connected world. (Vodafone, 2010)
Objectives & Goals – Widely bringing ICT facilities and services to the population in Vietnam. – Setting up telecom centers, especially in the countryside to provide free library, posts, and telecom services. – Training computer and Internet skills for high school and college students. – Installing optical fiber and broadband across Vietnam. (Van, 2005) -Bring superior telecommunications and data services for both personal users and companies. (Vodafone, 2010) -Profits maximization
  1. How an organization meets the objectives of different stakeholders
  1. Responsibilities of an organization
  1. National environment that businesses operate
  1. How economic systems allocate resources effectively
  2. Impact of fiscal and monetary policy
  3. Impact of competition policy and regulatory mechanisms
  • References
  • Appendices

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