Business Organisation and Management
Business Organisation and Management
This domain covers ownership forms, management functions, structures and leadership. You must compare sole traders, partnerships, companies and cooperatives, and explain how planning, organising, leading and controlling turn resources into results.
Core rules
- A sole trader is easy to form but has unlimited liability; personal assets can be used to pay business debts.
- A partnership shares capital and skills, but ordinary partners usually face unlimited liability.
- A private company (Pty Ltd) is a separate legal person with limited liability, perpetual succession and stricter registration and reporting requirements.
- A cooperative is owned and controlled by members, usually on a one-member, one-vote basis, and distributes surplus according to member use or agreement.
- Management functions: planning sets goals; organising allocates tasks and resources; leading motivates and directs; controlling compares performance with plans.
Worked example
Two partners run a bakery and want to expand. A partnership could raise capital from a new partner, but all partners may risk personal assets. A private company can issue shares to raise funds and gives shareholders limited liability, but it must register, keep proper records and comply with company law. The recommendation should depend on the amount of capital needed, the partners’ attitude to risk and their willingness to accept formal reporting, not simply on which form sounds more prestigious.
Traps that cost marks
- Saying shareholders in a partnership.
- Confusing limited liability with limited capital.
- Assuming a company is always cheaper or easier to run.
- Describing leadership as the same as management.
- Ignoring the compliance costs of a formal company.