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Unit 2 types of organizations

Industry, in a general sense, the production of goods and services in an economy. The term industry also refers to a group of enterprises (private businesses or government-operated corporations) that produce a specific type of good or service – for example, the beverage industry, the gold industry, or the music industry. Some industries produce physical goods, such as lumber, steel, or textiles. Other industries-such as the airline, railroad, and trucking industries – provide services by transporting people or products from one place to another. Still other industries, such as the banking and restaurant industries, provide services such as lending money and serving food, respectively.

Industries may be classified as primary, secondary, or tertiary industries.

primary industriesproduce and collect things like crops, metals, raw materials, etc. Agriculture, commercial fishing, mining, and the forest industry are primary industries. They use farmland, oceans, mineral deposits, and forests, respectively, as their major inputs.

secondary industriesuse raw materials to make goods to be sold or to make machines, etc. that are used to make goods. For example, the construction industry produces houses, other buildings, and roads. Its inputs include lumber manufactured by the forest industry. The largest group of secondary industries is the manufacturing industries. Manufacturing industries produce a vast array of consumer and producer goods, such as processed food, clothing, heavy machinery, automobiles, electronics, and household appliances.

tertiary industriesare businesses whose work involves doing something for customers but not producing goods; they provide services. For example, retail stores, universities, hotels, banks, television stations, hospitals, and travel agencies are all tertiary industries. Also classified as tertiary industries are all forms of government activity, ranging from local trash disposal to the armed forces.

The United States government has developed a set of codes called the Standard Industrial Classification (SIC) to classify industries. SIC codes classify enterprises by the type of product or service they generate. The SIC is a series of numbers, each ranging from 0 to 9, used to label industries. Primary industries use either 0 or 1, secondary industries use 1, 2, or 3, and tertiary industries use numbers 4 through 9. As more digits are added to the number, the classification becomes more specific. For example, the SIC code 8 refers to services, 82 refers to educational services, and 829903 refers to music and drama schools.

Within these main sectors there are many different types of organisation, each of which has its own particular character­istics, functions, and benefits. Some are easily recognised as private enterprises, some are definitely public enterprises.

Organisational structure and communication

Two main characteristics of any organisation are (a) the division of la­bour, and (b) the distribution of authority. The ‘division of labour’ refers to the variety of operations that the organisation must carry out in order to achieve its main objectives. The ‘distribution of authority’ refers to the decision-making apparatus required to plan and control these operations. Both of these characteristics may be shown in the organisation chart.

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