Website
Guide


Home

Overview


Model
(Enlarged)


Uses

Examples


Quotes

Feedback    
Public-
ations



Build
your own
model

Owners

The owner should bring honor to the house, not the house to its owner. Cicero


Owners of an organization exercise the ultimate control. They may benefit from the efforts of it, either by receiving an income or from the proceeds of its sale or dissolution.

Commercial:
Owners of commercial organizations include individual proprietors, partners, private shareholders and institutional shareholders such as investment and pension funds. The amount of control which they exercise varies and is often limited by their ability to agree and act together. In practice, control actually resides with the senior management.

Non-commercial: 
Organizations of a non-commercial nature (charities, schools, hospitals, local or central government) have a different concept of ‘ownership’. The legal owners (exercising control) could be trustees, governors, commissioners or elected representatives. The beneficial owners (who receive the proceeds on the dissolution of the organization and the disposal of its assets) are usually different from the legal owners and may be another charity, local or central government or some other body.

Motives of ownership:
  The motives and assumed responsibilities of ownership vary according to the type of organization:
Sole proprietors
do most of the work, assume the risks and take responsibilities and for this reason try to retain control.
Shareholders
  may just want to receive a steady income over the years or see the value of their shares rise.
Trustees
of a charity may act from a sense of public duty, kudos or derived status.
Members
of a partnership or mutual association share the profit without it being dispersed to other parties.

O
wners v managers:  The managers and the owners should both have the ultimate success of the organization in mind. However, there could be a conflict of interest - the managers of a business wanting to build it up steadily and soundly, while the shareholders wanting fast growth to make a capital gain. Similarly, trustees of a charity are often cautious and exasperate managers by taking too long to reach decisions and failing to support innovative ideas. In some instances it may be difficult to discover who the owners actually are - they may only be apparent when the organization is dissolved! >>>