Business Organizations in the UK

The heading and therefore the subject of the text is Business Organizations in the UK. The author considers the subject under the following headings: firstly different organizational forms of business organizations in the UK, secondlyadvantages and disadvantages of different organizational forms, then theregistered companyand its sub-types: unlimited liability companyand limited liability company, nextthe forms of limitedliability company:the company limited by guarantee, and the company limited by sharesand finally the differences betweenpublicand private limited companies.

Let me start with the first point: different organizational formsand underline that the author distinguishes three basic types: the sole trader, the partnershipand theregistered company.The author gives the definition of these organizational forms.

Thus, the sole trader business is legally owned and controlled by one person. The partnershipis a business owned by two or more partners who share the profits and losses. The registered companyis an organization that makes or sells goods or services to make a profit. Now we can focus on the advantagesanddisadvantagesof each type. Let’s firstly underline the advantages: among the advantages of the sole trader we can name the next ones: the sole traderhas great freedom, can employ other people, retains all the profits. The partnershipallows for an increased capital base, improved borrowings and reduces the problems relating to holidays and sickness. Advantages anddisadvantages of the registered company depend on the sub-type of the company. In the case of a limited liability company the shareholders have limited liability, if it is an unlimited liability company the shareholders loss all their money if the company goes bankrupt.

A few words about disadvantages. The author outlines the following ones. The sole tradersuffers disadvantages including: limited company, limited borrowing, problems with holiday and sickness, and limited scope for expansion. Thepartnershipis not separate legal person under the law, and partners are jointly liable for the debts and obligations of the partnership without limit; and jointly and independently for torts committed by partners and employees of the firm.

Now I’d like to go on to the registered company and its sub-types. The author tells about limited liability company and its sub-types:company limited by guaranteeand company limited by shares and unlimited liability company. The company limitedby guarantee is a company where shareholders are responsible for paying debts up to a certain amount if the company goes bankrupt. The company limited byshares is a company where shareholders are responsible for paying debts up to the amount of their unpaid shares,if the company goes bankrupt.

And finally I’d like to brief on private and public companiesand differences between them. A private companyis a company owned by people or other companies; a company whose shares are not openly traded and can only pass to another person with an agreement of other shareholders.

A public company is a company owned by people or other companies; a company whose shares are openly traded. It is important to highlight the differences betweenpublic andprivatecompanies:

· the private company has the word Limited (Ltd), whereas the public company has the words Public Limited Company (PLc)

· the private company may have one director whereas the public company must have at least two

· there are not age limits for the directors of the private company unless the company is a subsidiary of a public company

· the company secretary of a private company does not need formal qualifications, whereas the company secretary of a public company does

· private companies are less strictly regulated, including: restrictions on loans to directors, and regulation of raising and maintenance of capital

· the starting capital for a public company is Ј50000, whereas a private company can commence trading immediately.

Having considered three main types of business organizations and their sub-types, their advantages and disadvantages we came to the conclusion that the first decision that must be made by those considering incorporation of a business is the type of company that will be suitable.

2. Advertising

Advertising and Promotion

Advertising can be classified into 2 broad categories: informative and persuasive. Typically an advert contains elements of both. When a product is first launched, sales are low because very few customers are aware that it exists. The role of advertising here may be to inform the public of the product's existence and its particular uses. The same applies when a product has been modified or improved. In other cases, e.g. new cars or scientific calculators, the nature of the product may be such that a large amount of technical information has to be supplied, and advertising again may have to be informative. Advertising that informs and educates consumers gives them greater choice in their selection of goods and services. It can be seen as a form of competition between firms and may encourage manufacturers to improve their products to the benefit of the consumer.

Persuasive advertising, as its name implies, is used to try and persuade a consumer to buy a particular product. Such advertising is subjective and contains many statements of opinion rather than fact, e.g. 'Carlsberg - the best lager in the world ... probably'. Persuasive advertising is normally associated with consumer products and is used heavily where differences between products are minor, e.g. toothpaste, baked beans, soap powder, washing liquids and lager.

Persuasive advertising has been criticized because it emphasizes the advantages of a product and attempts to make those who do not use the product feel as if they are missing out. It plays on jealousy, envy and 'keeping up with the Joneses'. However, there are a number of regulations that control the content of advertisements, and firms are required to follow the British Code of Advertising Practice. Some important extracts from this code are:

· all advertisements should be legal, decent, honest and truthful

· all advertisements should be prepared with a sense of responsibility to the consumer

· all advertisements should conform to the principles of fair competition as generally accepted in business

· no advertisement should bring advertising into disrepute or reduce confidence in advertising as a service to industry and to the public.

When the code is breached advertisers are quick to amend or withdraw the advertisement concerned. If they do not do this the media may agree not to sell them advertising space or airtime and they may risk unwelcome publicity from the Advertising Standards Authority. In the case of TV commercials, every film must be approved for transmission before it can be screened, to ensure that it complies with the Independent Broadcasting Authority's Code of Practice.

It is normally very difficult to distinguish between the persuasive and informative elements in any advertisement. There is generally a blend of both.

Perhaps the best example of informative advertising is the advert for Begee's, which simply states what the company sells, its address and telephone number. The advert for Charles King has elements of both. It informs the consumer of opening times for parts and accessories, and of the location of the company, but also tries to persuade the consumer by the offer of a free gift for Sunday shoppers. The advert for Vitapointe is obviously the one that contains the largest persuasive element.

Once the firm has decided that advertising is going to play some role in the marketing of its product(s), it must then decide on the message, the media and the receiver. All these factors will be linked. It could be that the receiver - the so-called target audience -will determine the message and the media. If, for example, the product is a children's toy, the advert should be placed on television at particular times of the day.

In designing the message the advertiser will need to consider the following:

· the content of the message: this will depend on the type of product and the market in which it is to be sold

· who is the receiver? The message may be directed at a particular group of the population, in which case it may have to be delivered in a particular way using a certain media

· the person used to send the message: very often large firms use celebrities that they think are appropriate for the product, e.g. Steve Cram and Start breakfast cereal, Jerry Hall and Bovril and Daley Thomson and Lucozade

· the timing and number of messages: an advertiser has a choice between 2 approaches to an advertising campaign. It can be extensive, where the object is to reach as wide an audience as possible using different media. On the other hand, it can be intensive, where the object is to reach a particular group repeatedly (e.g. products such as lager, coffee, washing powder and toilet rolls advertised intensively on television).

Having decided on the message, the advertiser then has to choose the most cost-effective medium (or media). This means choosing the medium that delivers the message to the right (and largest) audience at the lowest possible cost. Examples of the media available are: commercial television, independent local radio, newspapers, magazines, billboards, buses, trains and bus shelters. For a firm advertising an industrial product the choice may be limited to exhibitions, specialist magazines and direct mail.

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