The majority of business organizations can be classified into four main areas according to their reasons for existence:
Profit-making organizations
For-Profit Commercial Organizations: Unincorporated Businesses and For-Profit Commercial Organizations: Incorporated Businesses aim to make profits in order to survive, grow and make the shareholders rich, for example Tesco or Carrefour.
Not-for-profit organizations
Types of Business Organizations: In Private Sector: Non-Profit Social Organizations make profit, but maximizing profit is not the main reason for their existence. They have a social goal in mind such as providing educational services for underprivileged children, protecting the natural environment, educating the society about a social cause such as negative effects of smoking cigarettes have on the human body or providing employment to the local community.
Charitable organizations
They generally aim to raise money from the rich for a particular cause, mainly supporting the poor. Charities do not make any profit, but they rely on generous donations which they later give away to the needy. Very often they raise money by selling goods donated by famous people such as singers or soccer players.
Public service organizations
State-owned public sector organizations aim to provide a service for people and maintain the proper functioning of the country, for example the Department of Defense.
Every business organization will also have different business objectives, which will vary according to the age of an organization and its development stage. These might be:
Survival
New and small businesses need to achieve its main objective, if they are about to survive on the market, such as attracting first customers. A new shop will not last long, if it does not sell any goods.
Growth and increasing market share
More established and older businesses will want to grow the company – increase the number of customers whom they attract into their business in the hopes of increasing the amount of profit that goes with. They will start offering more products, open new branches, hire more employees and maintain stable supply chains. Hopefully, it will ultimately lead to increasing market share.
Increasing efficiency and maximizing profit
Being efficient with the resources (factors of production) which you have is very important. More mature organizations will maximize profits by lowering the average cost, hence benefiting from economies of scale to maximize the returns for their shareholders.
