Types of organisation

In business there are different types of organisation categorised by different types of ownership.

  • private sector
  • public sector
  • third sector

These different categories of ownership make up what we call the sectors of the economy.

Private sector

A supermarket checkout.Supermarkets operate in the private sector
Supermarkets operate in the private sector

Private sector organisations are owned by individuals. These businesses are driven by profit.

The profit from private sector organisations benefits the owners, shareholders and investors.

They are financed by private money from shareholders and by bank loans.

Public sector

Ambulances outside a hospital. Hospitals operate in the public sector
Hospitals operate in the public sector

Public sector organisations are owned by the government. They provide goods and services for the benefit of the community.

They are run by the government. They operate with money raised from taxes.

Third sector

A charity shop. Charities operate in the third sector
Charities operate in the third sector

Third sector organisations are owned and run voluntarily by trustees.

These organisations are not run by the need to make profit but by the need to help the community.

They operate with money from donations and gifts. Any profits are reinvested in the organisation.

Third sector organisations can be run as a social enterprise.