Chapter 22 Impact of Organisations Learning Outcomes Upon

Chapter 22

Impact of Organisations

Learning Outcomes Upon completion of this chapter you should be able to: • Understand the benefits that organisations bring to society and the economy • Recognise the possible negative impacts of an enterprise on a community.

Types of Impact An organisation’s impact on a community can be: • Positive: when it benefits a community • Negative: when it involves costs or a loss to the community

Types of Organisation • A commercial organisation aims to make a profit. Most businesses are commercial organisations. Examples include banks, shops and airlines. • A non-commercial organisation has not been set up for the sole purpose of making a profit. The not-for-profit sector includes many charities and voluntary organisations that provide a range of services and benefits to communities. • Organisations can be local, national or international.

Economic Benefits of Organisations • Employment: direct and indirect jobs created • Tax Revenue: organisations will contribute to local authority rates • Improved Standard of Living: employees will have disposable income • Multiplier Effect: extra income in an area leads to increased spending • Economic Growth: increase in goods/services produced • Balance of Payments: increase in goods/services produced in Ireland may lead to a reduction in imports or increase in exports

Social Benefits of Organisations • More local services to provide for the needs of organisations can also be used by local people. • Increased Choice/Lower Prices for Consumers: new organisations provide extra goods and services and choice • Promotes Enterprise Culture: seeing local entrepreneurs can encourage others to establish businesses • Improved Quality of Life: successful social and cultural enterprises improve community spirit

Environmental Benefits of Organisations • Pollution Controls: new developments have to obey strict rules to limit pollution • Recycling Facilities: some businesses use rainwater harvesting and recycling to reduce their consumption and environmental impact. • Energy Efficiency: industry is increasingly using renewable energy • Land Usage: organisations make use of vacant land to develop community services. Local authorities provide parklands and sporting organisations develop land to improve local facilities.

Negative Impacts of Organisations • Customers: producing poor quality goods, not protecting personal details • Employees: inadequate health and safety training, unfair wages, making employees redundant • Suppliers: not paying for goods on time, seeking large discounts • Government: not paying appropriate taxes, disobeying laws • Society and Local Community: noise, air, and land pollution

Judging the Success of an Enterprise • Staff Relations • Customer Loyalty • Size of Business • How Long the Business Has Survived • Comparison with Competitors • Awards • Social and Environmental Responsibility

Recap and Review Can you do the following? • Understand the benefits that organisations bring to society and the economy • Recognise the possible negative impacts of an enterprise on a community