Understanding the Concept of Business Characteristics

Instructions
Submit your report to Canvas/Turnitin on or before the due date specified by your lecturer/Supervisor.  
Professional presentation of work is expected including appropriate source referencing (both in-text and a complete Reference List) using the APA 7th edition format. The number of references will not be marked; however, their relevance and reliability will be. 

Explanatory note:
Defining the nature of business is difficult as business covers a very wide range of organizations with different aims, processes, owners, obligations to external parties, and many other differences. To define and understand we need to look at the different types, the legal structures, the purposes, the organizational structures and the operational needs and structures. You will not find one single definition. You will find a set of characteristics of the business based on what it does and for who. 

When we understand the nature of a business in this sense we can then look at what is the best way for them to organize the business (organizational structure) and their operational structure so they get things done the most efficient way.
We want to know if they have the right structures. 

How do we know if they got it right? We look at their performance. What is performance is the next question. It is achieving their purpose as efficiently as possible.  

In Summary: The nature of the business tells us what the purpose and aims are.  The purpose flows into which structures are best.  The structures affect how well the business performs (meets its purpose).  This assessment follows this sequence. 

Question 1

A.Define 8 characteristics of a business. Then explain what being ‘in business’ means by reference to 5 KEY characteristics that will be evident in any organisation. In your discussion note how the characteristic is or is not applied in a profit and a not-for-profit business.

B. Using examples of business from the following four types of business:
Service
Manufacturing
Merchandising and 
Hybrids 

Compare how the nature of each business affects the achievement of the business purpose by referring to how the focus of the business differs with purpose, and one example of how this is reflected in their business operational structure or organisational structure for each type of business.

Question 2

A.The legal and ownership structure of a business:
Create a table to compare each of the entities below. Use the table provided in the appendix to compare each structure. 

Explanatory note

Sole trader
Partnership
Company

B. Evaluate each of the three legal structures above for a business. The business must be a family owned business with the family members engaged in managing the business, with 5 employees, selling goods to the public and buying materials locally. This only requires a simple description of the business.  Evaluate which is the best suited for this business using the elements in the table. 

Your evaluation should conclude with which you consider to best suit the needs of the family business. The needs are to have a family business where all the family members are involved, where they have the least risk, and where control can be passed to the children in time. (These three needs of the family business are your purposes so use the table you completed to help answer this)

Question  3. 
A.Choose 4 organisations and compare the nature of each.  The organisations are to be chosen from:
1. An accounting or law firm operating as a partnership
2. A company with shareholders who are investing money in the company and have no involvement with the business except receiving dividends paid from profits.
3. A charity in New Zealand which is a tier 1 or 2  charity (this is a larger charity)
4.A sports club. This is a not-for-profit organisation but is not a charity (see resources)

Task: Using the table in Appendix B - For each of the organisations briefly compare each in relation to: 

Profit motive  
Purpose - IF you cannot find this online then set out your assumptions based on what you know about the organisation. State clearly that this is your assumption 

Who the business is there to benefit  (this may overlap or even be the same as purpose for some organisations – if this is the case say so clearly) Social or environmental activities including why the organisations may undertake these.

Task: Write a mission statement for each of the organisations.  You may take guidance from an existing mission statement you find, but write your own using the guides provided in the resources which reflects the nature of the business.  

B.Using the same organisations above describe and compare how each would measure meeting their primary purpose (you can assume what that is) and then consider why the nature of the business is important to their performance in relation to that purpose and how that is reflected in the measurement.

C. With reference to profit motive, purpose and social activities, discuss why a charity would not normally operate as a limited liability company that has private investor shareholders. Also discuss why a company that does community work is not normally a charity.