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1
Purpose of business organisations 
1.1 What all organisations have in common 
An
 
organisation 
is: 'a
 social arrangement
 
which pursues collective 
goals
, which 
controls
 
its own 
performance and which has a 
boundary
separating it from its environment'. 
Here are some examples of organisations. 

A multinational car manufacturer (eg Ford) 

A 
local 
authority 

An accountancy firm (eg Ernst & Young) 

A trade union (eg Unison) 

A charity (eg Oxfam) 

An 
army 
 EXAM FOCUS POINT 
This chapter lays the foundation for an understanding of what organisations are and how they are 
controlled. According to the Study Guide, it is not sufficient to simply understand these topics – you 
must also be able to 
apply
your knowledge.
BPP Tutor Toolkit Copy

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CHAPTER 1
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BUSINESS ORGANISATIONS AND THEIR STAKEHOLDERS 
 
5 
The common characteristics of organisations are as follows. 
(a) 
Organisations are preoccupied with 
performance
, and meeting or improving their standards. 
(b) 
Organisations contain formal, documented 
systems and procedures
which enable them to control 
what they do. 
(c) 
Different people do different things, or 
specialise 
in one activity. 
(d) They 
pursue
 
a 
variety of objectives 
and goals. 
(e) 
Most organisations obtain 
inputs
(eg materials), and 
process
them into 
outputs
(eg for others to 
buy). 
1.2 Why do organisations exist? 
Organisations can achieve results which individuals cannot achieve by themselves.
(a) Organisations