Summarize the three types of organizations classified according to the three different purposes for which they are formed. Give an example of each and the purpose and customers they serve.

Question

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Answer 1

The three types of organizations classified according to the three different purposes for which they are formed are:

1. For-profit organizations. These are formed to make money, or profits, by offering products or services. Examples include Apple, 3M, Verizon, Mondelez Foods, and Johnson & Johnson. The companies sell a wide variety of goods and services to the general public: Apple sells computers and phones, 3M sells many household items, Mondelez sells packaged foods, and Johnson & Johnson sells health-related products. On a smaller level, the many small stores in a downtown area are for-profit organizations, as are sole proprietors who sell a service, such as tax accountants and actuaries.

2. Nonprofit organizations. These are formed to offer services to some clients, not to make a profit. Examples include hospitals and colleges, as well as well-known organizations like the Red Cross, the Salvation Army, and Goodwill. Often nonprofit organizations serve people who are underprivileged or otherwise underserved, such as the poor, or people in recovery, or the elderly.

3. Mutual-benefit organizations. These are voluntary collectives whose purpose is to advance members' interests. Examples include unions and trade associations, such as TIAA-CREF, the Teamsters Union, and the AFL-CIO. Public unions, which represent public employees such as police officers, are also mutual-benefit associations.