Small firms tend to operate in niche markets - offering better quality goods
Divorce of ownership from control
A scenario where a company's ownership and management control lie in entirely different hands. The shareholders don't make the daily business decisions, the managers or directors do.
Principal-agent problem
When the interests of a company's owners (the principals) are not aligned with those of its managers (the agents) who make decisions on their behalf. This can lead to conflicts of interest, as managers may prioritize their own goals over the objectives of the company's owners.
Public organizations
Funded by taxpayers, a broad sector of the economy encompassing education, healthcare, social welfare, infrastructure, emergency services, public transportation, government agencies, law enforcement and national defense, as well as all manner of other public goods and services.
Private organisations
Part of a country's economic system that is run by individuals and companies, rather than a government entity. Most private sector organizations are run with the intention of making profit.
Types of organizations
Profit organizations
Non-profit organizations
Profit organizations
Aims to maximise the financial benefit of its shareholders and owners. The goal of the organisation is to earn maximum profits.
Non-profit organizations
Social enterprises that aim to create social capital (solve a problem or create social change). Since non-profits do not attempt to maximise profits, they also do not pay dividends to shareholders. Instead, nonprofits use their capital and funds to cover the costs of their operations.
