Types of organisations
OVER TO YOU Revision checklist 1. What is the difference between private sector and public sector organisations? 2. State three differences between a sole trader and a private limited company. 3. Who (a) owns and (b) controls a public limited company? Explain why this distinction might lead to conflict. 4. Why might the directors of a public limited company decide to convert the business back into a private limited company by buying a majority of the shares? 5. Explain how legal personality and continuity help businesses and companies to operate effectively. 6. In what way does limited liability make it easier for companies to raise finance? 7. Using the examples of a sole-trader business and a public limited company, explain how the relationship between ownership and control differs in these two types of organisations. 8. Using the examples of a partnership and a public limited company, explain how the legal structure of a business affects its ability to raise finance. 9. List two organisations in your own country that are in the public sector. 10. Analyse one impact of the distinction between ownership and control for: a. shareholders of a plc b. employees of a plc. 11. Explain two potential advantages to a country’s economy from microfinance providers. 12. Explain two potential advantages and two potential disadvantages to a country when its government uses public– private partnerships to pay for and manage health clinics.
on a search engine called BackRub. In 1997, they decided to rename BackRub and came up with Google (derived from ‘googol’, a mathematical term for the number represented by the numeral 1 followed by 100 zeros). With $100 000 support from a backer, Google Inc. was set up in 1998 in a garage in California. Later that year, PC Magazine recognised Google’s search engine as one of the top 100 websites. In 2000, Google became available in many languages including French, German, Italian and Chinese. By 2004, the Google search index contained six billion items, including 4.28 billion web pages and 880 million images. It moved to an office in California called Googleplex with more than 800 employees and offices all over the world. In the same year, Google became a public limited company offering for sale 19 605 052 shares at an opening price of $85 a share. Over the next five years, Google refined and added to its search engines a range of products such as Google News, Google Earth, Google Maps and Google Video. Today, Google is a huge multinational corporation worth around $160 billion and its share price is over $500 a share.
20 marks, 40 minutes 1. Define the term ‘partnership’.
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2. Outline two possible benefits to Larry Page and Sergey Brin of starting Google as a partnership.
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3. Analyse two possible problems Larry Page and Sergey Brin might encounter by starting Google as a partnership.
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4. Discuss the advantages and disadvantages to Google of its conversion to a public limited company in 2004.
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Key concept question
Exam practice question
20 marks, 40 minutes
THE GOOGLE™ PHENOMENON In 1995, Larry Page and Sergey Brin met at Stanford University. The following year they formed a partnership and began collaborating
With reference to one or two organisation(s) that you have studied, evaluate the impact different types of organisational ownership have on business strategy. [20]
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