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Business Organizations

Business Organizations. Mr. Bammel. 3 Major Types. Sole Proprietorships Partnerships Corporations. Everyone will be divided into groups of 3.

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Business Organizations

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  1. Business Organizations Mr. Bammel

  2. 3 Major Types Sole Proprietorships Partnerships Corporations

  3. Everyone will be divided into groups of 3. Each group will be given 1 of the major 3 types of Business organization. Your job as a group will be to examine that business organization is great detail and create a poster displaying the necessary information.

  4. What is Needed… Explain the details of WHAT that type of business organization is focused on. Definition, Characteristics, etc. Advantages – major concept with explanation of advantage Disadvantages – major concept with explanation of disadvantage Bold Concepts of the section (defined on your page and underlined/highlighted in some form).

  5. Sole Proprietorships (Pages 57-59) Partnerships (Pages 60-62) Corporations (Pages 62-65)

  6. Now we will have all the other people in the room make their way around the room and fill in the information about each Business Organization.

  7. Sole Proprietorship • A business owned and run by one person and is the easiest to set up; • Advantages: • Ease of set up • Ease if management • Owner receives all profits • No separate business taxes • Psychological satisfaction • Ease of getting out

  8. Disadvantages: • Unlimited Liability • Difficult to raise financial capital • Small size and lack of efficiency • Limited managerial experience • Difficult to attract qualified employees • Limited life

  9. Partnerships • Business jointly owned by two or more persons; Types include general, limited, and limited Liability; • Advantages: • Ease of establishment • Ease of management • No special taxes • Easier financial capital • Slightly larger size • Easier to attract qualified employees

  10. Disadvantages: • Each partner is fully responsible for other partners • Limited life • Potential for conflict

  11. Corporations • A business recognized by law as its own legal entity; therefore the owners and operators are separate; • Advantages • Ease of raising financial capital • Hiring professional managers • Limited liability of owners • Unlimited life

  12. Disadvantages • Difficulty and expense of getting a charter • Owners have little or no say in the operations • Double Taxation • More government regulations due to size.

  13. Business Growth Businesses can grow in one of two ways: reinvesting profits or a merger – a combination of 2 or more businesses to create a single business.

  14. Reinvestment Investing in factories, machines and new technologies to promote growth. Process of examining your net income (subtracting expenses from revenues) and coming to the cash flow, or the measure of profits for the business, to establish money that can be reinvested.

  15. Why Merge Growth at a quicker rate Development of better efficiency To help with the production of a better product A process to eliminate a rival For just a change of an image

  16. Mergers and other Business Organizations I would like for you to create a collage of pictures which will represent all the types of mergers and other business organizations. For each type, draw and label the picture and then provide a quick 1-2 sentence explanation of how your picture displays the concept.

  17. Pages 71 - 78 Horizontal Merger Vertical Merger Conglomerate Multinational Consumer Cooperatives Service Cooperatives Producer Cooperatives Labor Unions Professional Associations Business Associations

  18. Examples Horizontal Merger United and Continental Airlines Vertical Merger  If Ford were to merge and a parts company Conglomerate  If Nike were to merge with 3M Multinational  McDonald’s

  19. Consumer Cooperative  Credit Unions Service Cooperative  Management Agencies Producer Cooperative  Seen in farm commodities Labor Unions  United Steel Workers

  20. Professional Association  American Education Research Association Business Associations  Texas Association of Soccer Coaches

  21. Direct Role of the Government Some government agencies produce and distribute goods and services just like any other corporation. Examples would be US Postal Service, Police, Fire Protection, etc. All ways provide a direct aspect of the productive process

  22. Indirect Role of the Government Acting as an umpire/regulating force for all businesses and consumers. Also when government provides help/money to those in need in particular situations; student loans, Social Security, etc.

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