Syllabus: SQA - Higher Course Spec Business Management
Module: Understanding Business
Lesson: Types of Organisations

Introduction

In the SQA Higher Business Management course, “Understanding business” forms the backbone of students’ initial learning. The topic Types of organisations helps learners grasp how businesses operate in different sectors and structures, which directly supports their ability to analyse business decisions later in the course.

This section aligns with the SQA curriculum’s aim to develop critical awareness of the dynamic and complex nature of business and the environment in which it operates. Understanding the different types of organisations is not only central to the syllabus but also foundational to developing economic literacy and business decision-making skills.

Key Concepts

The SQA Higher Business Management course covers the following key organisation types:

• Private Sector Organisations

  • Sole traders

  • Partnerships

  • Private limited companies (Ltd)

  • Public limited companies (Plc)

  • Franchises

  • Multinationals

• Public Sector Organisations

  • Central government (e.g. NHS)

  • Local government (e.g. councils)

  • Public corporations

• Third Sector Organisations

  • Charities

  • Voluntary organisations

  • Social enterprises

Students explore:

• Ownership and control structures

• Aims and objectives typical of each type

• Sources of finance

• Advantages and disadvantages of each

• The role each plays in the economy

There’s a strong emphasis on comparing and contrasting these types to assess their suitability in different contexts. This comparative skill becomes key in later course areas like business decision-making and organisational structures.

Real-World Relevance

Understanding organisational types is not just theoretical. It helps students make sense of everyday business news and decisions.

For instance:

• Franchise example: McDonald’s is a classic case of a global franchise model. Students can explore how franchising allows rapid growth while retaining local ownership.

• Social enterprise example: Brewgooder, a craft beer company based in Scotland, donates its profits to clean water projects—perfect for illustrating third-sector aims.

• Public sector example: The Scottish Government’s delivery of education and health services shows how different public bodies operate with distinct roles, funding, and accountability.

Encouraging learners to identify these types in their community or news stories helps root abstract concepts in lived experience.

How It’s Assessed

This topic features prominently in the question paper and the assignment components of the Higher course.

In the question paper, expect:

• Describe and explain questions, often asking for two or three features of a type of organisation

• Compare questions between sectors (e.g. public vs private)

• Justify or evaluate questions on why a certain type of organisation is suitable in a scenario

Command words to focus on:

• “Explain” – show understanding of characteristics or decisions

• “Compare” – highlight similarities and differences

• “Justify” – use logical reasoning and evidence

• “Evaluate” – weigh pros and cons, giving supported judgement

Understanding the characteristics and purposes of each organisation type underpins many other parts of the course, so clarity here supports success across the exam.

Enterprise Skills Integration

This topic is a strong opportunity to introduce and reinforce enterprise thinking:

• Decision-making: Students can evaluate why an entrepreneur might choose to be a sole trader or pursue a franchise model

• Risk management: Compare the financial risks in partnerships versus limited companies

• Problem-solving: Create scenarios where students must select the most suitable business structure for a given product, market, or scale of growth

Encouraging students to “think like a founder” not only makes the learning stick, it deepens their grasp of real business challenges.

Careers Links

Linking this topic to Gatsby Benchmarks 4, 5 and 6 is straightforward:

• Careers in the private sector: Roles in marketing, finance, or operations across various business structures

• Public sector careers: Teaching, local government, healthcare—many learners will work in or alongside public sector bodies

• Social enterprise and charity work: Offers students insight into purpose-driven career paths, especially appealing to values-led students

To bridge to careers:

• Invite a local entrepreneur or franchisee to speak

• Use job descriptions to show how roles vary across organisation types

• Task students with mapping a career path in a private vs public organisation

Teaching Notes

Tips:

• Use local businesses to bring concepts to life. Even a corner shop or local council office can become a case study.

• Encourage students to reflect on the organisations their family or neighbours work in.

• Highlight overlaps: e.g. public-private partnerships or hybrid models like the BBC.

Common pitfalls:

• Confusing private limited companies (Ltd) with public limited companies (Plc)

• Overgeneralising that all public sector organisations aim for profit—reinforce their service-driven focus

• Treating types as static—students benefit from understanding that organisations can evolve, merge, or shift sectors

Extension activities:

• Debate: “Should essential services be run by the public sector?”

• Research project: Compare a local business, a council department, and a charity in terms of aims and impact

• Business simulation: Create a pitch for a new enterprise, choosing and justifying the organisational type