Understanding Business Organisations

Overview

Framework:
RQF
Level:
Level 2
Unit No:
Y/505/2494
Credits:
3
Guided learning hours:
24 hours

Assessment Guidance

Portfolio of Evidence

Aim

The aim of this unit is to help learners understand different types of businesses and how they are organised. Learners will also consider different administrative processes and their importance to the business.

Unit Learning Outcomes

1

Understand the aims and objectives of different types of business organisation.

Reasons for setting aims and objectives may include:

  • providing an overview of what the business hopes to achieve in the future
  • specific tasks that will contribute to the overall aim

Examples of aims and objectives may include:

  • survival
  • profit
  • growth
  • market share
  • customer satisfaction
  • ethical
  • sustainable

Assessment Criteria

  • 1.1
    Explain why organisations set aims and objectives.
  • 1.2
    Identify the aims and objectives of different types of business organisation.
2

Know the different types of business ownership.

Types of business ownership may include:


  • sole proprietors
  • partnerships
  • corporations
  • franchising
  • co-operatives and joint ventures

Reasons for different types of ownership may include:


  • sole proprietor receives all profits, takes all decisions and has unlimited responsibility for all losses and debts
  • owners can work together using shared skills and knowledge
  • shareholders own and control the organisation
  • opportunity to enter new markets whilst have the support of a larger organisation
  •  size – e.g. window cleaning business likely to be sole proprietor. But larger businesses need more staff, skills and tend to be more complex 
  • profit share - e.g. sole proprietor and partners receives all profits 
  • risk/responsibility - sole proprietor is responsible for all losses and debts; corporations have ‘limited liability’
  • skills – e.g. partners can work together using shared skills and knowledge
  • shareholders own and control the organisation; all organisations with staff can share skills
  • growth - opportunity to enter new markets whilst having the support of a larger organisation

Assessment Criteria

  • 1.1
    Describe the different types of business ownership.
  • 2.2
    Outline with examples, why different organisations have different types of ownership.
3

Know how the structures of organisations differ.

Functional areas of organisations may include:


  • Operations
  • purchasing
  • manufacturing
  • learning and development
  • human resources
  • administration
  • sales
  • marketing
  • finance

Examples given of different organisational structures may include:


  • divisional structures
  • total quality management
  • matrix management 
  • cultural management
  • functional management
  • functional organisational structure e.g. production, marketing, finance, etc
  • product based structure e.g. in a pharmaceutical company the structure could be vaccines, cosmetics, sterile equipment supplies, antibiotics
  • geographical structure – e.g. a road haulage company may be structured as southern region, East Anglia, midlands region, northern and Scottish region

Assessment Criteria

  • 3.1
    Identify organisational functional areas and their key roles.
  • 3.2
    Describe the organisational structures of different businesses.
4

Know the importance of administration within an organisation.

Administrative skills and their role may include:

  • IT skills - internal and external communication
  • office procedures - health and safety compliance, efficiency of day-to-day work
  • telecommunication skills - internal and external customer satisfaction
  • stock management - efficient use of materials, financial benefits
  • planning and managing travel arrangements, meetings etc. - efficiency of business

Commonly used administrative processes may include:

  • annual leave and sick leave
  • grievance procedures
  • IT code of practice
  • financial arrangements
  • dress code
  • ordering stationery

Importance of administrative processes may include:

  • provide an objective set of rules that help in the efficiency and effectiveness of the business
  • decisions are fair and consistent if the processes are adhered to
  • managers are accountable for their decisions

Value/importance of efficient administration:

• customer satisfaction 

• speed of service 

• impact of errors 

• contribution to good team work and job satisfaction

Assessment Criteria

  • 4.1
    Identify different administrative skills and their role in business organisations.
  • 4.2
    Describe some commonly used administrative processes and their value to business.
  • 4.3
    Explain why efficient administration is critical to business success.