You started Five Star to make a profit from doing hair well. That reason why Five Star exists is its pūtake.
Providing haircuts is just what Five Star does, not why Five Star exists.
Eleven sections, about an hour and a quarter all up. One section is one sitting. Do that one and stop.
Three from the lessons so far. Have a go before you open them, because trying first is what makes them stick.
Profit is $40.00, and it is before tax. Tax is worked out from profit, so it can never be one of the expenses you take off to get there.
The bank interest is income, not revenue. You did not sell anything to get it, so it is not revenue. All revenue is income; not all income is revenue.
No, the government does not supply your power. A power company does, and you buy power from the power company exactly like you buy colour from your colour wholesaler.
The government does something very different. The government receives tax and spends that tax on things like roads and hospitals.
A power company sells power.
The government supplies power.
Let's compare Five Star to The Sunday Chair.
Your salon. Two chairs, one apprentice. You pay rent every week whether anyone books or not. Five Star has to make a profit or the salon closes.
A free haircut service in a community hall, one Sunday a month. Volunteer stylists, about 25 people through the chairs. Each Sunday it gets $250.00 from a council grant and about $50.00 in donations, and costs $100.00 to run.
The Sunday Chair has no revenue at all, because nothing is ever sold to anyone.
The Sunday Chair does have an income, though: about $300.00 each Sunday from the grant and the donations. None of that income is revenue, because nobody pays for anything.
The Sunday Chair spends $100.00 each Sunday, so $200.00 is left. That $200.00 is not profit, because The Sunday Chair is not trying to make a profit. The $200.00 pays for the next Sunday.
Income is everything the organisation receives, from any source, and revenue is only the part of the income that comes from selling.
If you judge The Sunday Chair the way you judged Five Star, you would call it a failure. You would be completely wrong, because it was never trying to make a profit. Both salons do the same work for different reasons. The reason an organisation exists is its pūtake.
The Sunday Chair is an organisation.
An organisation is a group of people who work together with a shared purpose.
Two things have to be true. There is more than one person, and they share a purpose.
So the list of organisations is much wider than shops and companies. All of these are organisations: whānau, hapū, iwi, clubs, charities, businesses, community groups, the government and banks.
Check each one against the two things: more than one person, and a shared purpose.
Both tests pass, so Five Star is an organisation.
Both tests pass, so The Sunday Chair is an organisation too, even though it sells nothing and employs nobody.
A business and an organisation are not the same thing.
Any group of people working together for a shared purpose. An organisation does not have to sell anything, and does not have to make money. A netball club is an organisation. So is the government.
An organisation that sells something and aims to make a profit from it. Five Star is a business. The Sunday Chair is not: it sells nothing and aims to make nothing. But it is absolutely an organisation.
Five Star sells haircuts and colours to make a profit, so Five Star is a business.
McDonald’s sells food to make a profit, so McDonald’s is a business.
Kmart sells goods in its shops to make a profit, so Kmart is a business.
The Sunday Chair is a group of volunteers who cut hair for the community for nothing. The Sunday Chair sells nothing, so it is not a business.
Your whānau is a group of people who work together to look after each other. Your whānau does not sell anything to make a profit, so it is not a business.
A netball club is a group of people who work together so its members can play netball. A netball club does not aim to make a profit, so it is not a business.
The government receives tax and spends that tax on things like roads and hospitals. The government does not aim to make a profit, so it is not a business.
Five Star is both a business and an organisation.
Two tests only: is it a group of people, and do they share a purpose?
The netball club committee is an organisation, a group with a shared purpose. Clubs are named in the standard's own list.
One person selling bracelets has a shared purpose but is not a group. Both tests have to pass.
Yes, your whānau are an organisation. Whānau is family, often a wider circle than just the people living in your house. (The NCEA glossary has the precise meaning.)
A family is obviously not a business, but that was never the test. The test is a group of people working together with a particular purpose, and a family working out together how to pay for something meets it exactly. The standard names whānau first in its own list of examples.
Notice what the test does not say. The test is not about your family in general. The test is about your family working together on something. That is what makes it an organisation here.
Now a separate question: should you choose a whānau to write about in your assessment? Probably not, because it is hard to state a family’s reason for being and there are too few other stakeholders left over. But that is advice about picking a good subject to write about. That advice does not change the answer above.
The queue is not an organisation. The people in it are a group, but they have no shared purpose: they all want different things and are not working together.
Yes, your city council is an organisation. Government at every level is a stakeholder, and it turns up in exam case studies.
Yes, a charity or community organisation is an organisation, and its pūtake is usually easy to state.
Yes, Five Star Hair Studio is an organisation. A business is one kind of organisation, not the only kind.
Both Five Star and The Sunday Chair provide haircuts, but they exist for different reasons.
Five Star exists to make a profit, a living for you, from doing hair well.
The Sunday Chair exists to cut hair for free for people who could not otherwise pay for it, and it is not trying to make a profit at all.
The reason an organisation exists is its pūtake.
The definition. In Commerce, pūtake is an organisation's reason for being.
Pūtake is why the organisation exists: not what it sells, not how it behaves, but why it is there at all.
A pūtake can be almost any reason to exist: to look after a forest or a river, to provide for future generations, or to make a profit.
You may be asked for the pūtake of an organisation you have never seen. These questions help you work it out.
A good pūtake helps you answer a real question about the organisation, such as Should Five Star drop its prices 20%?
Dropping prices 20% takes a fifth off the price of every job. Five Star is open to make a living, so unless the lower price brings in enough extra clients to cover that, the answer is probably not, and you can say exactly why.
Would cheaper prices make it a great salon? Maybe. Would keeping prices up make it a great salon? Also maybe. The pūtake fits either answer, which means it gives you no answer at all.
So here is how to test your own. Write your pūtake, then ask it a real question about the organisation. If your pūtake would support both a yes and a no, it is too vague. Rewrite it until it points one way.
Spell it pūtake, with the macron over the u, or puutake. Use the word itself when you write about an organisation.
Five Star's pūtake is to make a living from doing hair well.
Five Star's putake is to make a living from doing hair well.
Five Star's mission is to make a living from doing hair well.
Pūtake and values are different things, so write about them separately. A value may shape the pūtake, but a value is not the reason the organisation exists.
Five Star's pūtake is to make a living from doing hair well.
Five Star's pūtake is to treat everyone with respect.
Five Star's pūtake is to be honest with every client.
Five Star's pūtake is to care about the environment.
Ask yourself: does this sentence say why the organisation exists, or how the organisation behaves?
That sentence is a pūtake, the reason the organisation is open at all. Take it away and there is no Sunday Chair.
That sentence is a value: how the salon behaves, not why the salon exists. Five Star would still be Five Star without it.
That sentence is a pūtake. Making a profit is a valid reason to exist.
That sentence is a value. A value might shape the pūtake, and might be why a salon chose refillable products, but on its own a value is not a reason to exist.
That sentence is a pūtake. The word “opened so” is the giveaway: it answers why, not how.
That sentence is a value. A value may shape the pūtake, but a value is not the reason the organisation exists.
Five Star is thinking about opening on Sundays. Before you can make the final decision, you need to know whose opinion you need to consider, and whose you do not.
A stakeholder is a person or group with a shared interest in an organisation.
There are two kinds of stakeholders : internal and external.
You are the owner, and you make the decision. You are part of Five Star, so you are an internal stakeholder.
Sanjay is your apprentice and works at Five Star. Sunday hours change Sanjay's working life, and Sanjay is part of Five Star, so Sanjay is an internal stakeholder.
Your clients are outside Five Star, but opening on Sundays changes when they can book. Your clients are affected by the decision, so they are external stakeholders.
Your landlord owns the building and is outside Five Star. Opening on Sundays changes how the landlord's building is used, so the landlord is an external stakeholder.
Your whānau are outside Five Star. Opening on Sundays means a seventh working day away from home, so your whānau are external stakeholders.
The colour wholesaler supplies Five Star with hair colour. Five Star pays the colour wholesaler for it, so the colour wholesaler is a supplier, not a stakeholder.
The power company supplies Five Star with power. Five Star pays the power company for it, so the power company is a supplier, not a stakeholder.
The bank supplies Five Star with a bank account. Five Star pays the bank for it, so the bank is a supplier, not a stakeholder.
The water board supplies Five Star with water. Five Star pays the water board for it, so the water board is a supplier, not a stakeholder.
The laundry service supplies Five Star with clean laundry. Five Star pays the laundry service for it, so the laundry service is a supplier, not a stakeholder.
Your colour wholesaler is a supplier: a business you buy from. The wholesaler cares whether Five Star stays open, but caring is not the test.
Sanjay is a stakeholder.
The colour wholesaler is a stakeholder.
The rule is about whose opinion the organisation would actually weigh before making a decision. You would not ring your colour wholesaler to ask whether to open on Sundays. You would think about Sanjay, your regulars and your whānau.
Your landlord is slightly different, and is a stakeholder. Your landlord is not selling you a product, but they have an ongoing interest in how their building is used.
Sanjay is an internal stakeholder, part of the organisation and in the room. Sunday hours change Sanjay's working life directly.
Your regular Saturday clients are external stakeholders, with a real interest in the decision but no part in making it.
Your colour wholesaler is not a stakeholder in this decision. Suppliers exist to make a profit, so their view is not weighed. You would not ring them to ask whether to open Sundays. They still matter to Five Star, just not as stakeholders.
The landlord is an external stakeholder: opening a seventh day affects the use of the landlord's building, and the landlord has an interest without deciding.
Your whānau at home are external stakeholders, and strong ones, because a seventh working day is a day Sierra is not at home. The standard lists whānau among stakeholders.
The salon two streets away is a competitor, not a stakeholder. They have an interest in you, but no shared interest in your organisation, and you would not weigh their view when deciding.
You are an internal stakeholder, and the easiest one to forget to name. You are a stakeholder in your own organisation.
The things people ask at exactly this point.
No, pūtake is not just the mission statement off the website.
Mission statements are often marketing: “to be New Zealand's most-loved salon” tells you nothing about why it opened. You often have to read between the lines to work out an organisation's pūtake from their mission statement.
No, an organisation cannot have more than one pūtake. The organisation's one pūtake can have two parts, if the parts fit together.
Two parts that fit“The netball club exists to give the town somewhere to play netball, and to bring the club's families together on a Saturday.” The families come together because the games are on.
Two parts that do not“The netball club exists to give the town somewhere to play netball, and to raise money for the town's food bank.” Saturday games do nothing for the food bank.
To find the pūtake, ask what would stop if the club shut tomorrow. The netball would stop, so the netball is the pūtake.
Yes, “make a profit” is a pūtake. Five Star's pūtake is exactly that.
If an organisation's pūtake has a second part, put the profit first: a bakery that exists to make a living and to keep a family recipe going.
Your colour wholesaler's view is not weighed when an organisation makes its own decision, however much the wholesaler cares whether Five Star stays open.
The problem. The standard allows a whānau, but a whānau rarely works as the organisation. It is hard to state a whānau's reason for being, and there are too few valid stakeholders left over.
Pick a charity or a business instead, because either one is an organisation on both tests.
The same finding is in the assessment reports.
The problem. Nothing is wrong with that pūtake. Schools really do exist for something like it. The problem is the link: not one word here explains how a minivan helps anyone become confident. The sentence puts a pūtake and a decision next to each other and hopes the reader joins them up.
School-and-asset answers keep failing for this reason: a school’s reason for being is about learning, and it takes real work to connect that to buying a vehicle.
“Our school’s pūtake is to help students become confident and resilient. We bought the minivan because it lets teams travel to tournaments, and a tournament is where students build the confidence our pūtake is about.”
Write the whole answer out, with the link inside it.
Read the second sentence on its own. The second sentence names the decision, names what the decision makes possible, and says the word pūtake again: three jobs, one sentence. Saying it once at the top is not referencing it in the justification.
The problem. The website has done nothing wrong; that is a normal thing for a salon to put on its site. The mistake is the student’s, for treating it as a pūtake.
“Most loved salon” is an ambition about how they want to be seen. That ambition never says why anyone opened the place. Ask the question: if the salon shut tomorrow, “being most loved” is not the thing that would stop happening.
Treat the website as where you start looking for a pūtake, not the answer. Dig past it to why they opened (a living for the owner, a gap in the suburb, training people up), then write that plainly.
The problem. Read that again and notice what is not there: the word pūtake appears nowhere in the whole answer. The thinking is right. That is a real reason for existing, properly worked out. The answer still does not satisfy the standard, because the standard asks you to discuss the organisation’s pūtake and the marker has to be able to see that you did.
“Their pūtake is to make a living for the owner and to train young stylists.”
Write the word.
The sentence is the same, with one word added, and now the sentence earns the mark.
National Moderator Report: “students should use the word ‘pūtake’.”
The problem. Those are values, how the organisation behaves. None of them is a reason to exist.
Ask why they are open at all, and write the answer to that. The values are still in the sentence, in the half that says how, where they belong.
National Moderator Report: values “may shape or inform pūtake, but differ from the organisation's reason for being.”
The problem. The two halves of that answer never meet. The pūtake is stated correctly at the top, nothing wrong with that sentence at all. Then the decision is justified entirely on running costs and safety, and the pūtake is never mentioned again.
Affordable food for the community would have been a brilliant reason to choose that van, and the student had it sitting right there and did not use it. The standard does not just want the pūtake stated; it wants it doing work.
“Our pūtake is to provide affordable food to the community. I chose the $40,000 van because its low running costs keep our delivery costs down, and that is what lets us keep the food affordable. Which is our pūtake.”
Write both halves, with the pūtake in each.
State the pūtake when you introduce the problem, and use it again when you explain the decision. The second mention is the one that earns the marks.
National Moderator Report, pūtake must be “discussed when introducing the NOI and referenced in explaining why a particular decision was made.”
The problem. The spelling is missing its macron. This is not a typo a marker lets through.
Write the word as pūtake or puutake. Nothing else is accepted.
The problem. The wholesaler is not a stakeholder, though it is true that they care. But suppliers exist to make a profit, so the organisation would not weigh their view when making its own decision.
Use people with a shared interest in the organisation itself: employees, customers, whānau and the community.
Organisation and business are not the same thing, and neither are pūtake and values. Each pair is two different words for two different things.
An organisationThe Sunday Chair: volunteers with one shared purpose.
An organisationFive Star: you and Sanjay, working together to make a living.
Not an organisation (but one person)Somebody cutting hair at home on their own. No group, so no organisation, however good the haircut.
A businessFive Star sells haircuts to make a profit.
Not a business (but an organisation)The Sunday Chair sells nothing, so it is an organisation but not a business.
An organisation's reason for being, why it exists at all.
To find a pūtake: why did somebody
start this organisation?, and what would stop happening if it shut tomorrow?
Spelled pūtake or puutake, never putake. Use the actual word in your answer.
A pūtake“Five Star exists to make a living for Sierra from doing hair well.”
Not a pūtake (but an ambition)“Five Star exists to be the best salon in town.” That is an ambition about how it wants to be seen, but it never says why the doors opened.
A value at Five Star“Everyone leaves feeling good about themselves.” True, and it is about how the salon behaves.
Why it is not the pūtakeIf Five Star shut tomorrow, the thing that would stop is Sierra earning a living, not people feeling good.
Internal, then externalSanjay is internal, and your clients are external. Sanjay is in the salon, in the room. Your clients have a real interest and no say.
NeitherThe colour wholesaler. Money moves every week, and markers rule suppliers out of the stakeholder list.
a.Write Five Star's pūtake in one or two sentences. Why does your salon exist? Not what it sells. Why it is open at all.
Stuck? Ask the three questions: why did somebody start it, what would stop happening if it shut, and does your sentence answer why rather than how?
“Five Star's pūtake is to make a profit, so it can pay me a living from doing hair well”.
Everything else the salon does (training Sanjay, opening on Saturdays, stocking good colour) is how it gets there, not why it is open.
Your pūtake might be a little different, and should be. Mark your pūtake against these three criteria:
b.A new salon opens two streets away and drops its prices by 20%. You are tempted to match them. Does cutting your prices 20% fit the pūtake you just wrote? One or two lines, and say which way, and why.
Yes, it fits. “Cutting prices fits Five Star's pūtake of being affordable to everyone in the suburb, because it keeps the salon within reach of clients who are struggling. But it would reduce profit, so I would need to check the salon can still cover its expenses and keep paying Sanjay.”
No, it does not. “Cutting prices by 20% goes against Five Star's pūtake, because the salon is open to make me a living and a 20% cut takes profit off every single client. I would compete on the quality of the work instead.”
There is no right answer here. Both would earn credit. What matters is that you tested the decision against the pūtake and said which way it came out. That is the move you get marks for at every grade, and the one that is easiest to leave out.
c.Name one internal and one external stakeholder in that pricing decision, and say in a few words what each would care about.
Internal, Sanjay. Cares whether there is still enough profit to fund the apprenticeship and the hours.
External, regular clients. Care about paying less, and about the salon still being there next year.
If you named the colour wholesaler, have another go. Suppliers are not stakeholders in a decision. If you named yourself, that is valid and internal, but pick someone else as well so you have two genuinely different views.
d.Now do the same for The Sunday Chair. Write its pūtake in your own words. One sentence is plenty.
“The Sunday Chair's pūtake is to give free haircuts to people in the community who could not otherwise afford one. It is not trying to make a profit.”
Notice how different that is from Five Star's, even though both cut hair. If your two sentences could be swapped between the organisations, at least one of them is too vague.
e.A friend writes: “Five Star's pūtake is to give great customer service.” What is wrong with it, and how would you fix it?
“Great customer service is a value. It is how Five Star behaves, not why it exists. If Five Star gave average service it would still be open, so that cannot be the reason it is there. Its pūtake is to make a profit, a living for Sierra from doing hair well; good service is one of the ways it does that.”
The test is the second sentence. If Five Star would still be open doing the thing badly, the thing is a value and not a pūtake. Run any candidate through that test and the two words stop blurring together.
f.Five Star's landlord is a stakeholder but its colour wholesaler does not. Why?
“The colour wholesaler exists to make a profit from selling to Five Star, so Five Star would not weigh their opinion when making its own decision. The landlord is not selling a product, they own the building and have an ongoing interest in how it is used, so their view is weighed. The landlord is an external stakeholder.”
Both halves are doing work. The first says why the wholesaler is out. The second sentence says what makes the landlord different, an ongoing interest in the building rather than a product to sell. An answer that only names one of the two halves has answered half the question.
Go Sierra, go!
Two lessons in and you can explain why a salon that gives away every haircut is not failing at business. Plenty of adults cannot do that. Lesson 3 when you are ready.