ExpertEasy2 marksMultiple Choice
Syllabus A: The business organisation and its external environmentSection ASyllabus AOrganizational Types
ACCA · Question 05 · Syllabus A: The business organisation and its external environment
AgriGrow is an organization owned entirely by the farmers who supply it with raw wheat. The organization processes the wheat and shares the profits among the farmers based on the volume they supplied. What type of organizational structure does AgriGrow represent?
AgriGrow is an organization owned entirely by the farmers who supply it with raw wheat. The organization processes the wheat and shares the profits among the farmers based on the volume they supplied. What type of organizational structure does AgriGrow represent?
Answer options:
A.
A public limited company
B.
A cooperative
C.
A non-governmental organization (NGO)
D.
A joint venture
How to approach this question
Look at the ownership structure and how profits are distributed. Ownership by suppliers/members points to a specific model.
Full Answer
B.A cooperative✓ Correct
Cooperatives are user-owned and user-controlled businesses that distribute benefits on the basis of use or volume supplied, rather than on the amount of capital invested.
Common mistakes
Assuming it's a joint venture. Joint ventures are usually between two distinct corporate entities for a specific project.
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