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Market Types
Market Types
Free or Market Economy
Mixed Economy
Planned Economy
Private (for profit business)
Unincorporated = Sole traders and Partnerships à Unlimited Liability (Loans, Debts)
Incorporated = Limited Liability
Private Limited Company
Public Limited
Who are the Board of Directors
Directors are people that represent the views/interests of the investors and are the oversight
CEO/COO or Founders take advice from the Board of Directors and CEOs/COOs also give updates to the Board of Directors
What is their objective? What is their role in running a company?
Ensure that the company is running fine and is profitable
Has the power to fire the CEO
Help the CEO run the company
Types of Management for a Business Organisation
Types of Management for a Business Organisation
Created by: ADGV ('19) & ValkrieJJ ('19)
Cooperatives
Cooperatives
A group of people who have cooperated together and built a business
All cooperatives have members
Share profits within the members
Co-ops can be found all around the world
5 Steps to making a co-op
1. Assemble the key organizers or members
2. Feasibility Study – Is your idea feasible for the market?
3. Business Plan
4. Incorporate (limited liability)
5. Begin business
Co-ops employees are managers and employees
Limited Cooperatives have board of directors and management team
Public-Private Partnerships (PPPs)
Public-Private Partnerships (PPPs)
PPP's are between a government agency and private-sector company can be used to finance, build and operate projects, such as public transportation networks, parks and convention centres.
http://www.investopedia.com/terms/p/public-private-partnerships.asp
- Financing a project through a public-private partnership can allow a project to be completed sooner or make it a possibility in the first place.
- Merit Goods:
- Good with positive externalities in consumption
o Health or medical benefits are positive externalities
o Education is a merit good as well
o More productive economy, greater tax revenue, brilliant inventions
- Public Goods:
o A commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization.
Non-profit Organizations are an organization that has been formed by a group of people in order "to pursue a common not-for-profit goal", that is, to pursue a stated goal without the intention of distributing excess revenue to members or leaders.
- Scandals: http://www.waccobb.net/forums/showthread.php?84129-Shocking-high-salaries-of-some-charity-CEOs-(Red-Cross-United-Way-Unicef)
- NGOs =
o Operate in a business-like way but without the profit motive
o Any surplus is reinvested
- Pressure Groups =
o Exist in order to raise awareness of an issue and gain public support
- Charities =
o Main source of funding is from the ultra-rich or from donations
o Many churches are considered charities
o Charities are tax-exempt
What is Microfinance?
What is Microfinance?
Microfinance is a type of banking service that is provided to unemployed or low-income individuals, or groups who otherwise have no other access to financial services.
1. A person who lives below the poverty line selects 4 people the trust and forms a group
2. The group goes through a 5-day or 1-month financial training program and borrowers open a savings account
a. The people will learn book-keeping, finance planning and business planning
b. This enables the group or people to build their start-up and grow it until they can profit and then pay back the loan
3. Each borrower gets a loan to open a small business (no collateral needed)
4. Weekly group meetings with a manager
5. Borrowers begin to repay loans and deposit savings
6. Upon full repayment borrowers can apply for another loan to expand their businesses
- Note: Micro financiers can exploit their clients by increasing the interest and basically earning back more than they loaned
- Fact: 90% of the clients in low-income developing countries are women
- Fact: Majority of micro-financed business start-ups fail
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