introduction to business © thomson south-western chapterchapter business organization 5
TRANSCRIPT
Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Business Organization
55
Introduction to Business© Thomson South-Western
Chapter 5
Slide 2
THE CHANGING U.S. JOB MARKET Employment data
Amount of people working Baby Boomers have dominated since the 60s 75% of the workforce was white workers, but that
number has dropped to 70% since 2012 Pressures on employees
Downsizing causing employees to take on more tasks and more hours
Introduction to Business© Thomson South-Western
Chapter 5
Slide 3
BUSINESS AND THE ECONOMY Size of businesses
Most are small businesses
Roles of business Employ people, pay taxes, and provide
goods and services (most important role)
Impact on a community More jobs, more income, and a thriving
economy
Introduction to Business© Thomson South-Western
Chapter 5
Slide 4
NUMBER OF EMPLOYEES IN U.S. BUSINESSES
78% have no other employees other than the owner
Introduction to Business© Thomson South-Western
Chapter 5
Slide 5
BUSINESS ACTIVITIES
Generating ideas Raising capital Employing and training personnel Buying goods and services Marketing goods and services Maintaining business records
Introduction to Business© Thomson South-Western
Chapter 5
Slide 6
TYPES OF BUSINESSES
Producers Create the product and services used by individuals and
businesses (extractors, manufacturers, and farmers) Ex: An automobile factory
Intermediaries Retailers and wholesalers- they are the businesses that sell the
goods and services of producers to people or other businesses Ex: A grocery store
Service businesses Offers services for sale instead of products Lowest paying in the US economy
Introduction to Business© Thomson South-Western
6-2 Terms
Proprietorship Partnership Corporation Partnership Agreement Articles of Incorporation Franchise
Chapter 5
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Introduction to Business© Thomson South-Western
Chapter 6
Slide 8
Types of Ownership
Sole Proprietorship Partnership Corporation
Introduction to Business© Thomson South-Western
Chapter 6
Slide 9
Sole Proprietorship
Owned, financed and managed by one individual who assumes all risk of loss and receives all profits
Can employ other staff Common in local building firms, small
shops, restaurants, butchers, etc.
Introduction to Business© Thomson South-Western
Chapter 6
Slide 10
Partnerships
Owned, financed and controlled by upwards of 2 partners who assume all risk of loss and receive all profit
Terms of Partnership agreed through contract
Common in professions – lawyers, accountants, architects, surveyors, estate agents, vets, etc.
Introduction to Business© Thomson South-Western
Chapter 6
Slide 11
Corporations
Form of business organization that is created by law, functions as a separate legal entity, and is owned by two or more individuals called stockholders.
Stockholders are at risk only for the amount of their financial investment.
Introduction to Business© Thomson South-Western
Chapter 5
Slide 12
FORMS OF OWNERSHIP
Introduction to Business© Thomson South-Western
Choosing a Form of Business Ownership
Choosing a proprietorship Freedom to work for themselves and have
total control Easy to set up There are tax advantages for owning your
own business, but if the business fails you are also responsible
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Introduction to Business© Thomson South-Western
Choosing a Partnershp
Best to have a partnership agreement, another name for a contract
Two or more people can invest their money and bring their expertise
Good for people who want to share their ideas
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Introduction to Business© Thomson South-Western
Choosing a Corporation
They are subject to many laws and are more difficult to form Must file articles of corporation, a written legal document that
defines ownership and operating procedures and conditions for the business
Must create corporate bylaws, operating procedures for the corporation
Must name a board of directors, people who will make major policy and financial decisions
Liability is limited for the owner Decisions are shared among board of directors and
shareholders
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Introduction to Business© Thomson South-Western
Other Forms of Ownership
Specialized Partnerships and Corporations Limited Liability Partnership Joint Venture S-corporation Limited Liability Company Nonprofit Corporation
Chapter 5
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Introduction to Business© Thomson South-Western
Other Forms of Ownership cont.
Cooperatives Franchises
Chapter 5
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Introduction to Business© Thomson South-Western
Chapter 5
Slide 18
DESIGNING AN EFFECTIVE BUSINESS ORGANIZATION Setting direction Principles of effective organization
Responsibility, authority, and accountability
Unity of command- there is a clear command chain
Span of control- number of employees assigned to a task or manager
Introduction to Business© Thomson South-Western
6-3 Terms
Mission statement Goal Policies Procedures Organization chart
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Introduction to Business© Thomson South-Western
Designing an Effective Business Organization Setting Direction
Mission Statement-short, specific written statement of the reason a business exists and what it wants to achieve
Goals Policies Procedures
Chapter 5
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Introduction to Business© Thomson South-Western
Designing an Effective Business Organization cont. Principles of Effective Organization
Responsibility, Authority, and Accountability
Unity of Command Span of Control
Chapter 5
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Introduction to Business© Thomson South-Western
Chapter 5
Slide 22
TYPES OF ORGANIZATIONAL STRUCTURES Functional organization structure
Employees report to the managers responsible for their task
Matrix organizational structure Employees with varying backgrounds are
assigned to work together because their expertise is required for the project.
Introduction to Business© Thomson South-Western
Chapter 5
Slide 23
BUSINESS ORGANIZATION CHART