Business Organization and Environment

Study Notes

Sole Proprietorship: Owned and operated by one individual, unlimited personal liability.
Partnership: Owned and operated by two or more individuals, shared profits and losses.
Corporation: Separate legal entity from owners, limited liability, owned by shareholders.

Micro Environment: Internal factors affecting business, e.g., employees, customers, suppliers.
Macro Environment: External factors affecting business, e.g., economy, government, technology.

Production: Creating goods or services, e.g., manufacturing, assembly.
Marketing: Promoting and selling goods or services, e.g., advertising, sales.
Finance: Managing financial resources, e.g., budgeting, investing.

Planning: Setting business objectives, e.g., goal-setting, strategy development.
Organizing: Allocating resources, e.g., delegation, departmentalization.
Leading: Directing and motivating employees, e.g., leadership, communication.
Controlling: Monitoring and correcting business performance, e.g., feedback, evaluation.

Social Responsibility: Businesses' obligation to society, e.g., environmental sustainability, community involvement.
Ethical Decision-Making: Making choices that balance business needs with moral principles, e.g., honesty, fairness.

Globalization: Increasing global interconnectedness and interdependence.
International Business: Conducting business across national borders, e.g., exporting, importing, foreign direct investment.

A Sole Proprietorship is a business owned and operated by one individual, with unlimited personal liability, where the owner has complete control and all profits.
A Partnership is a business owned and operated by two or more individuals, with shared profits and losses, and joint decision-making authority.
A Corporation is a separate legal entity from its owners, with limited liability, owned by shareholders, and provides benefits such as tax advantages and perpetual existence.

The Micro Environment includes internal factors that affect a business, such as employees, customers, suppliers, and management, which can be controlled by the business.
The Macro Environment consists of external factors that affect a business, such as the economy, government, technology, and demographics, which are beyond the control of the business.

Production involves creating goods or services through processes such as manufacturing, assembly, and quality control, and is a critical function of any business.
Marketing involves promoting and selling goods or services through advertising, sales, and distribution, to satisfy customer needs and wants.
Finance involves managing financial resources, including budgeting, investing, and financing, to support business operations and achieve objectives.

Planning involves setting business objectives, developing strategies, and allocating resources to achieve goals, which helps to direct the business.
Organizing involves allocating resources, assigning tasks, and structuring the organization to achieve objectives, and involves delegation and departmentalization.
Leading involves directing and motivating employees, through leadership, communication, and motivation, to achieve business objectives.
Controlling involves monitoring and correcting business performance, through feedback, evaluation, and corrective action, to ensure goals are met.

Social Responsibility involves a business's obligation to society, including environmental sustainability, community involvement, and ethical practices.
Ethical Decision-Making involves making choices that balance business needs with moral principles, such as honesty, fairness, and respect for stakeholders.

Globalization involves the increasing global interconnectedness and interdependence of economies, cultures, and societies.
International Business involves conducting business across national borders, through exporting, importing, foreign direct investment, and other activities.