Practise identifying charity characteristics and objectives, and comparing non-profit organisations with profit-based organisations for IB Business Management SL.
It is now mid-2019. Production of solar power systems has been going for over a year. Sales have exceeded forecasts and reached 5000 systems for the year. All profits have been reinvested into developing a portable biomass source of electricity* (PBS) as an alternative to solar power systems. The PBS technology is now fully developed and tested. Su has data to help her decide whether to go into production. The new production facility will cost $1 million.
AS produces solar power systems for Afghanistan, where many areas lack reliable electricity after years of war. The project has risks from political instability, infrastructure, distribution to remote customers and changing external conditions. AS needs careful marketing planning, human-resource planning, contingency planning and preparation for uncertainty. The proposed Doorway Foundation joint venture would give DF majority ownership and senior managers, require AS to increase production and restructure, and could help bring electricity and IT to schools; it could also reduce Su’s control and make the Afghanistan project take second place.
It is now mid-2019. Production of solar power systems has been going for over a year. Sales have exceeded forecasts and reached 5000 systems for the year. All profits have been reinvested into developing a portable biomass source of electricity* (PBS) as an alternative to solar power systems.
The PBS technology is now fully developed and tested. Su has data to help her decide whether to go into production. The new production facility will cost million.
The costs and the price of the product once production has begun are estimated in Table 3.
Table 3: Estimated cost and price data for PBS
In a separate development, Doorway Foundation (DF), a multibillion-dollar charity established by the owners of one of the world's largest IT businesses, has approached Su. The foundation has a major IT initiative to bring IT to schools in Afghanistan, Myanmar and Bangladesh. By forming a joint venture, DF could use AS's expertise and local knowledge to help solve some of the electricity supply and IT problems in Afghanistan. DF would have majority ownership in the joint venture, provide most of the senior managers, and is likely to expect changes in the way AS operates. AS would have to significantly increase the production of solar power systems and would have to restructure. Some managers may lose influence over decisions. Su is worried that her Afghanistan project (AS) would take second place. However, she sees this as a huge opportunity to make a real change in young people's lives.
* portable biomass source of electricity: a means of generating electricity using the heat obtained from burning plant material and/or animal waste
Define two characteristics of a charity.