1 / 28

Chapter 5 Business Organization

Chapter 5 Business Organization. 5.1 Business in the U.S. Economy. Employee Data. Baby boomers are the people born between 1946 & 1964. The average age of the worker in 2010 will be 40+. There will also be a surge of 16-24 age group.

jamessage
Download Presentation

Chapter 5 Business Organization

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 5 Business Organization

  2. 5.1 Business in the U.S. Economy

  3. Employee Data • Baby boomers are the people born between 1946 & 1964. • The average age of the worker in 2010 will be 40+. • There will also be a surge of 16-24 age group. • The number of white workers will drop while the numbers for minorities and women will rise.

  4. Pressures on Employees • Technology should have shortened the work day – it did not! • 7 out of 10 parents don’t think they are spending enough time with kids. • A contingent worker is one who has no explicit or implicit contract for long-term employment. • The contingent worker workforce will increase.

  5. Size of Businesses • 18 million businesses have no other employees than the owner. • 5 million businesses have less than 20 employees. • See chart on Pg. 104

  6. Roles of Business • Business… • Provide employment • Provide wages to buy goods & services • Provide profits for owners & investors • Pay taxes • MAKE & DISTRIBUTE PRODUCTS & SERVICES DESIRED BY CUSTOMERS

  7. Impact on a Community • A large business in a community can attract other businesses. • Residency will increase in the community causing small businesses to start up for support. • Wages to employees help boost the economy – housing, cars, food, entertainment.

  8. Business Activities • Generating Ideas • Raising Capital • Employing & Training Personnel • Buying Goods & Services • Marketing Goods & Services • Maintain Business Records

  9. Producers • Producers create the products and services used by individuals and other businesses. • A business that takes resources from nature for direct consumption or for use in developing other products is an extractor. • Farmers cultivate land use other nature resources to grow crops and livestock for consumption. • Manufacturers get supplies from other producers and convert them into products.

  10. Intermediaries • Intermediaries are businesses involved in selling the goods and services of producers to consumers and other businesses. • Examples – retailers & wholesalers • Transportation, advertising, storage, sales, and data processing.

  11. Service Businesses • Service business carries out activities that are consumed by its customers.

  12. 5.2 Forms of Ownership

  13. Proprietorship • A proprietorship is a business owned and run by just one person. • It is the easiest form of business to start & end. • If the business fails, the owner has almost no shelter from creditors.

  14. Partnership • A partnership is a business owned and controlled by two or more people who have entered into a written agreement.

  15. Corporation • A corporation is a separate legal entity formed by documents filed with your state. • It is owned by shareholders and ran by a board of directors. • Most difficult to start. • More legal requirements. • Corps protect the shareholder to only the amount of $ they invest.

  16. Starting a Proprietorship • Easy • Obtain required licenses & permits • Record expenses & income & pay taxes • Taxes paid once on income – combined with owner’s income. • Law views business & owner as one – debt acquired any way necessary.

  17. Choosing a Partnership • The partnership agreement is a written agreement among all owners. • Details rules & guidelines of business • 2 people combined to invest $ • Binded to partner decisions • No protection of personal assets of partners

  18. Choosing a Corporation • Most popular form for large business • More laws and more difficult to establish • Treated as an “individual” • The articles of incorporation is a written legal document that defines ownership and operating procedures and conditions for the business. • The business must create corporate bylaws that are the operating procedures for the corporation.

  19. Choosing a Corporation • It must name a board of directors, the people who will make the major policy and financial decisions for the business. • Discloses info to shareholders • The liability of any owner is limited to the amount of $ invested. • Must pay taxes on profits earned. • Investors must pay taxes on earnings from investments - double taxation.

  20. Specialized Partnerships & Ownerships • A limited liability partnership identifies some investors who cannot lose more than the amount of their investment, but hey are not allowed to participate in day-to-day management of the business. • A join venture is a unique business organized by 2 or more other businesses to operate for a limited time and for a specific project.

  21. Specialized Partnerships & Ownerships • S-corporation offers the limited liability of a corporation. All taxes passes through owners. • Limited liability company provides liability protection for owners. • A nonprofit corporation is a group of people who join to do some activity that benefits the public.

  22. Cooperative & Franchises • A cooperative is owned by members, serves their needs, & is managed in their interest. • A franchise is a written contract granting permission to operate a business to sell products and services in a set way. • The company that owns the product or service and grants the rights to another business is known as the franchiser. • The company purchasing the rights to run the business is the franchisee.

  23. 5.3 Organizational Structure for Businesses

  24. Setting Direction • A mission statement is a short, specific written statement of the reason a business exists & what it wants to achieve. • A goal is a precise statement of results the business expects to achieve. • Policies are guidelines used in making consistent decisions. • Procedures are descriptions of the way work is to be done.

  25. Principles of Effective Organization • Responsibility, Authority, & Accountability • Responsibility is the obligation to complete specific work. • Authority is the right to make decisions about how responsibilities should be accomplished. • Accountability is taking responsibility for the results achieved.

  26. Principles of Effective Organization • Unity of Command • There is a clear reporting relationship for all staff of a business. • Span of Control • The number of employees who are assigned to a particular work task and manager.

  27. Type of Organizational Structures • Organization chart is a diagram that shows the structure of an organization, classifications of work and jobs, and the relationships among those classifications.

  28. Type of Organizational Structures • Functional Organization Structure • Work is arranged within main business functions such as production, operations, marketing, and human resources. • Matrix Organizational Structure • Work is structured around specific projects, products, or customer groups.

More Related