1. Securing customers' interests through mutual ownership

2. LEARNING OUTCOMES FOR THIS LESSON Understand that all businesses have ownership and management structures. Understand the need for an organisation’s structures to be appropriate to the organisation’s purpose and vision. Appreciate how mutuality can provide mutual organisations with competitive advantage.

3. All businesses have owners. This may be just one person. This is called a sole trader. It may be many thousands of owners. These are shareholders. They all also need people to make decisions. INTRODUCTION

4. MEMEBERS Nationwide is a mutual. In a mutual, the members own the business. They are also the customers. A new group - shareholders - is created if a mutual becomes a limited company Shareholders want the company to make profit so they can earn dividends. Building societies do not have shareholders. This means they can give better terms to members.

5. COMPETING Businesses compete better if they offer distinctive services. Nationwide highlights that it 'is proud to be different'. It offers services to compete with banks. Its costs are lower as it does not pay dividends. Nationwide can measure effectiveness by the gains to its members. During 2003/04: –Savers gained £236m through better savings rates. –Borrowers gained £352m through lower rates and fees.

6. CONCLUSION Nationwide succeeds because it provides a good service to its members. It does not have to make profits for shareholders so costs for members are low. This gives it an advantage over those organisations that are no longer mutuals.

7. ASSESSMENT OF LEARNING OUTCOMES How well do you understand that all businesses have ownership and management structures? How well do you understand the need for an organisation’s structures to be appropriate to the organisation’s purpose and vision? How well do you appreciate how mutuality can provide mutual organisations with competitive advantage?