CIMA F3 clearly distinguishes between not-for-profit/public sector organisations and for-profit private sector organisations, particularly in relation to objectives, performance measurement, and stakeholder focus.
Statement A – Correct
Clinic A is funded by central government and provides free healthcare. This fits the CIMA F3 definition of a not-for-profit (public sector) organisation, whose primary purpose is service delivery rather than profit generation.
Clinic B is a listed company owned by shareholders and charges patients directly, making it a for-profit organisation.
✔ Therefore, statement A is correct.
Statement B – Incorrect
Maximising shareholder wealth is the primary financial objective only of for-profit companies, such as Clinic B.
Public sector organisations like Clinic A do not have shareholders and therefore cannot have shareholder wealth maximisation as an objective.
✘ Statement B is incorrect.
Statement C – Correct
CIMA F3 teaches that public sector organisations are primarily assessed on value for money, which incorporates:
Economy
Efficiency
Effectiveness
Since Clinic A is government-funded, its performance would be appraised mainly using value-for-money criteria rather than profitability.
✔ Statement C is correct.
Statement D – Incorrect
While Clinic B may consider some non-financial objectives (such as service quality or reputation), its primary objectives are financial, particularly profit and shareholder wealth maximisation.
The statement implies equal weighting, which is inconsistent with CIMA F3 theory.
✘ Statement D is incorrect.
Statement E – Correct
Despite differing ownership and funding, both organisations share the same primary non-financial objective: the provision of quality healthcare.
CIMA F3 highlights that organisations in the same sector often share common service objectives, regardless of profit motive.
✔ Statement E is correct.
