Business organisations and stakeholders f1 acca

Business organisations and stakeholders f1 acca Business organisations and stakeholders f1 acca Business organisations and stakeholders f1 acca

Business Organisations and Stakeholders - ACCA F1

• Topic: Understanding organisations and their stakeholders.

• Purpose: Explore types, purposes, and stakeholder

dynamics

• 2025 Updates: ESG focus, digital transformation, global

standards

1 / 15

Definition of an Organisation

• Organisation: A collective pursuing common goals,

controlling performance, with a boundary separating it from the environment

• Business Organisations: Aim for profit (commercial) or

societal welfare (non-profit)

2 / 15

Purpose of Organisations

• Collaboration: Combine resources and skills for shared

goals

• Efficiency: Optimize resource use for productivity.

• Scale: Enable large-scale operations beyond individual

capacity

3 / 15

Characteristics of Organisations

• Collective Goals: Shared objectives guide activities.

• Control: Mechanisms to monitor performance.

• Boundary: Distinction from external environment.

• Structure: Defined roles and hierarchies.

4 / 15

Types of Organisations: By Objective

Objective Maximize profit Promote social/political/environmental welfare Examples Sole trader, Partnership, Limited company Government agencies, Schools, Charities

5 / 15

Limited Companies

• Characteristics:

– Separate legal entity; limited liability for shareholders

– Shareholders provide capital, receive profits, limited

control

– Board of Directors (BOD): Executive (daily operations) and non-executive (strategic guidance)

6 / 15

Types of Limited Companies

Share Transfer Restricted, needs approval Freely traded on stock exchanges

Capital Founders, partners, venture capital Public share issuance

7 / 15

Pros and Cons of Limited Companies

• Pros: Large capital, limited liability, separate legal entity,

flexible operations, unlimited scale

• Cons: Costly legal/audit requirements, limited shareholder

power

8 / 15

Types of Organisations: By Ownership

Ownership Individuals/Shareholders Government Workers/Consumers Independent

Objective Profit or non-profit Community needs Share profits Social/Environmental welfare

9 / 15

Stakeholders - Overview

• Definition: Individuals/groups who influence or are affected

by the organisations activities

• Groups: Internal (employees, managers), Connected

(shareholders, customers), External (government, interest

groups)

10 / 15

Stakeholder Classification

Internal Employees, Managers Salary, job satisfaction Conflict, resignation

Connected Shareholders, Customers, Suppliers Returns, quality, timely payments Withdrawal, refusal to buy, delayed delivery External Government, Interest Groups Economic development, advocacy Tax changes, protests

11 / 15

Stakeholder Conflict and Mendelows Matrix

• Conflict Example: Shareholders (high returns) vs.

Financial Providers (low risk)

• Mendelows Matrix:

– Key Players: High power/high interest (e.g., major

customers)

– Keep Satisfied: High power/low interest (e.g.,

shareholders)

– Keep Informed: Low power/high interest (e.g., charities) – Minimal Effort: Low power/low interest (e.g., temporary workers)

12 / 15

Exercise: Question 1

• Which defines an organisation?

• A A social arrangement pursuing collective goals, controlling

performance, with a boundary separating it from its

environment

• B A social arrangement existing to make a profit, controlling

performance, within certain boundaries

13 / 15

Exercise: Solution to Question 1

• A (True):

– Matches definition: Collective goals, performance control, boundary with environment

– Covers all organisations (profit and non-profit)

• B (False):

– Incorrectly limits organisations to profit-making entities – Excludes non-profits (e.g., charities, schools)

• Answer: A.

14 / 15

Exercise: Question 2 and Solution

• Question: A private sector organisation is owned or run by:

– A Central government

– B Local government

– C Government agencies

– D None of the above

• Solution:

– A, B, C (False): These refer to public sector organisations

– D (True): Private sector owned/run by individuals or

shareholders

• Answer: D.

15 / 15